Chapter 10.III, Problem 1RE

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8th Edition

Robert Brechner + 1 other

ISBN: 9781305585447

Textbook Problem

Calculate the bank discount and proceeds for the following simple discount notes. Use the ordinary interest method, 360 days, when applicable.

Face Value |
Discount Rate (%) |
Term |
Bank Discount |
Proceeds |

$4,500 | 13 | 6 months | $292.50 | $4,207.50 |

To determine

**To calculate:** The amount of bank discount and proceeds by using the ordinary interest methodif required where face value is

Explanation

**Given Information:**

Face value is

**Formula used:**

The formula to compute the amount of bank discount is,

The formula to calculate amount of proceeds is,

**Calculation:**

Consider thatface value of loan is

Compute the discount amount,

Evaluate the time as,

Compute the amount of bank discount by substituting

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