Mark signs a note promising to pay $825 in 3.5 years with simple interest at 10.75%. Then, 9 months before the note comes due, the holder of the note sells it to a local bank whichdiscounts the note based on a bank discount rate of 18%.(a) What did the bank pay the holder of the note when it was sold 9 months before maturity?$X

The promissory notes are those legal instruments where one party promises to pay a sum of money to…

Answered: Mark signs a note promising to pay $825…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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(c) Pearl Inc. loans money to John Kruk Corporation in the amount of $832,000. Pearl accepts an 8% note due in 7 years with interest payable semiannually. After 2 years (and receipt of interest for 2 years), Pearl needs money and therefore sells the note to Chicago National Bank, which demands interest on the note of 10% compounded semiannually. What is the Amount received on sale of note LINK TO TEXT LINK TO TEXT LINK TO TEXT
Q.Mr. Jasim receives a note for $60,000 which is due in 180 days with simple interest rate of 15%. The note is discounted immediately at a bank that charges 12% simple discount. How much is the proceeds from the note?
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5. Murni signed a 300-day simple interest note for $6750 with a bank that uses exact interest. If the rate is 7% %, find the maturity value.
A man borrows money from a bank but he only received 83% of the amount requested. He signs a promissory note that he would pay P73,330 at the end of 8 years. How much money is requested from the bank if the simple interest rate is 10.211%?
Bella deposits $6400 in a savings account at a bank that offers interest of 1.8% on such accounts. What is the value of the money in her savings account in two year's time? Select one: a. $6,630.4 b. $6,632.5 C. $8,911 O d. d. $6,505.2 <
10
If you sign a discount note for $7,500 at a bank discount rate of 5% for 3 months, what is the effective interest rate? Round to the nearest tenth percent. Step 1 The effective interest rate is the actual interest rate charged on a discounted note and takes into account the fact that the borrower does not receive the full amount of the principal. It is calculated using the bank discount, the proceeds, and time. The bank discount is calculated as follows where the discount rate is given as a decimal and the time will be a fraction whose numerator is the given amount of time in months and denominator is 12 months. bank discount = face value ✕ discount rate ✕ time The rate was given to be 5%. As a decimal, we have . Calculate the bank discount (in $) for the $7,500 promissory note at a discount of 5% for 3 months. bank discount = face value ✕ discount rate ✕ amount of time in months 12 months = $7,500 ✕ ✕ 3 12 = $
2. On 30 December 2020, Salina received a 90-day promissory note with a simple interest rate of 4.5%. She discounted the note after 32 days with a bank discount rate of 2.33%. The proceeds received was RM10,784.36. Using Banker's Rule. No use excel. Find: a) the maturity date of the note. b) the maturity value of the note.
A bank customer saved 5000 PLN on the savings account. The deposit lasted for 2 years. For the first 6 months continuous interest rate method was used with the 4,5% nominal interest rate, for the next 9 months compound interest rate method was used, and during the last months simple interest rate method was used also with 4,5% nominal interest rate (after each change in the interest method, interest was added to the account balance). Please calculate what was the nominal interest rate in the second period if the profit from the deposit was 414,70 PLN after the whole 2 years period?
A banks lends a customer OMR 6,000. At the end of 9 years he repays this amount plus interest. The amount he repays is OMR 10,000. What is the interest rate charged by the bank? What sum must be invested now to provide an amount of OMR 18,000 at the end of 15 years if interest is to accumulate at 8% for the first 10 years and 12% thereafter?
19. Misk, Inc. received from a customer a one-year, $750,000 note bearing annual interest of 9%. After holding the note for six months, Misk discounted the note at National Bank at an effective interest rate of 12%. What amount of cash did Misk receive from the bank?

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