Concept explainers
(a)
The bank’s discount of simple discount note of $ 4,250, 190 days at
(a)
Answer to Problem 1ECP
The Bank’s discount is
Explanation of Solution
Formula used:
Calculation:
Given that,
Now, substitute
For non-interest-bearing promissory note, the equation becomes,
Hence, the maturity value is
Substitute,
Hence, the Bank’s discount is
(b)
The proceeds of simple discount note of $ 4,250, 190 days at
(b)
Answer to Problem 1ECP
The proceeds is
Explanation of Solution
Formula used:
Calculation:
From part (a) the Maturity value is $4,250 and Bank discount is $56.07.
Substitute
Hence, the Proceeds is
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Chapter 11 Solutions
Practical Business Math Procedures
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