Answered: John signed a 90-day note with a face…

John signed a 90-day note with a face value of $6,000 and a discount rate of 14.57%. How much did the John receive from the bank? (ordinary time)

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter17: Accounting For Notes And Interest

Section: Chapter Questions

Problem 1CE

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Concept explainers

Cost of Credit

The cost of credit is an extra amount that the borrower has to pay besides the loan amount. These credit charges may vary from loan to loan. The cost of credit includes interest charges, maintenance charges, and arrangement charges. Some of the costs are mandatorily collected by the lender based on the loan amount and tenure of the loan. The cost of credit is also called finance charges of the credit.

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John signed a 90-day note with a face value of $6,000 and a discount rate of 14.57%. How much did the John receive from the bank? (ordinary time)

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