Question 10 Suppose the person holding the promissory note from the above problem sells the note after 80 days (40 days of discounting). Find the discount amount if the note is discounted at 10%. Type your answer Question 11 Find the proceeds from the above problem. Type your answer Question 12 A bank makes a new loan of $15,000 face value at a discount rate of 8% for 6 months. Find the proceeds.

Question 10 Suppose the person holding the promissory note from the above problem sells the note after 80 days (40 days of discounting). Find the discount amount if the note is discounted at 10%. Type your answer Question 11 Find the proceeds from the above problem. Type your answer Question 12 A bank makes a new loan of $15,000 face value at a discount rate of 8% for 6 months. Find the proceeds.

Corporate Financial Accounting

14th Edition

ISBN:9781305653535

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter10: Liabilities: Current, Installment Notes, And Contingencies

Section: Chapter Questions

Problem 10.1BE: Proceeds from notes payable On January 26, Nyree Co. borrowed cash from Conrad Bank by issuing a...

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Gifts Galore Inc. borrowed 1.5 million from National City Bank. The loan was made at a simple annual interest rate of 9% a year for 3 months. A 20% compensating balance requirement raised the effective interest rate. a. The nominal annual rate on the loan was 11.25%. What is the true effective rate? b. What would be the effective cost of the loan if the note required discount interest? c. What would be the nominal annual interest rate on the loan if the bank did not require a compensating balance but required repayment in three equal monthly installments?
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