Chapter 10, Problem 36AT

### Contemporary Mathematics for Busin...

8th Edition
Robert Brechner + 1 other
ISBN: 9781305585447

Chapter
Section

### Contemporary Mathematics for Busin...

8th Edition
Robert Brechner + 1 other
ISBN: 9781305585447
Textbook Problem

# Varsity Press, a publisher of college textbooks, received a $70,000 promissory note at 12% ordinary interest for 60 days from one of its customers. Reader's Choice Bookstores. After 20 days. Varsity Press discounted the note at the Grove Isle Bank at a discount rate of 14.5%. The note was made on March 21.a. What was the maturity date of the note?b. What was the maturity value of the note?c. What was the discount date of the note?d. What proceeds did Varsity Press receive after discounting the note? (a) To determine To calculate: The maturity date where V press received a$70,000 promissory note, the interest rate is 12% for 60 days from its customer R bookstore. After 20 days, the note was discounted at the rate 14.5%. The date of the note is 21 March.

Explanation

Given Information:

V press received a $70,000 promissory note, the interest rate is 12% for 60 days from its customer R bookstore. After 20 days, the note was discounted at the rate 14.5%. The date of the note is 21 March. Formula used: Steps for determining the maturity date of a loan are: Step1. Calculate the number of days that are left in the month loan is taken by subtracting the loan date from the number of days in the month. Step2. Subtract the number of days remaining in the first month from the total duration of the loan. Step3. Keep on subtracting the days from consequent months until the maturity date corresponds to the difference (b) To determine To calculate: The maturity value of the promissory note where V press received a$70,000 promissory note, the interest rate is 12% for 60 days from its customer R bookstore. After 20 days, the note was discounted at the rate 14.5%. The date of the note is 21 March.

(c)

To determine

To calculate: The discount date of the promissory note where V press received a $70,000 promissory note, the interest rate is 12% for 60 days from its customer R bookstore. After 20 days, the note was discounted at the rate 14.5%. The date of the note is 21 March. (d) To determine To calculate: The proceeds of the promissory note where V press received a$70,000 promissory note, the interest rate is 12% for 60 days from its customer R bookstore. After 20 days, the note was discounted at the rate 14.5%. The date of the note is 21 March.

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