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 which discounts 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

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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      =  $

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?