John Doe has a choice of two different notes that both have a a face value ( principal) of $15,000 for 60 days. One note has a simple interest rate of 8%, while the other note has a simple discount rate of 8%. For each type of note, calculate : a- interest owed b- maturity value c- proceeds, and d- effective rate. Which of the two choices is a better deal and why?

John Doe has a choice of two different notes that both have a a face value ( principal) of $15,000 for 60 days. One note has a simple interest rate of 8%, while the other note has a simple discount rate of 8%. For each type of note, calculate : a- interest owed b- maturity value c- proceeds, and d- effective rate. Which of the two choices is a better deal and why?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter16: Working Capital Policy And Short-term Financing

Section: Chapter Questions

Problem 14P

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