Question

# Bill Blank signed an \$7,540 note at Citizen's Bank. Citizen's charges a 8.2% discount rate. Assume...

Bill Blank signed an \$7,540 note at Citizen's Bank. Citizen's charges a 8.2% discount rate. Assume the loan is for 270 days. a. Find the proceeds. (Use 360 days a year. Round your intermediate calculations and final answer to the nearest cent.) Proceeds b. Find the effective rate charged by the bank. (Use 360 days a year. Do not round intermediate calculations. Round your answer to the nearest tenth percent.) Effective rate
You were offered the opportunity to purchase either a simple interest note or a simple discount note with the following terms: \$21,399 at 8% for 36 months. a. Calculate the effective interest rate. (Do not round intermediate calculations. Round your final answer to the nearest tenth percent.) Effective interest rate 9.4 % b. Based on the effective interest rate, which would you choose? • simple discount note simple interest note
On Sept. 12, Sheffield Company discounted at Sunshine Bank a \$7,520 (maturity value), 142-day note dated June 12. Sunshine's discount rate was 9%. (Use Days in a year table.) What proceeds did Sheffield Company receive? (Use 360 days a year. Do not round intermediate calculations.) Proceeds received \$ g ^ a 2 n
The Treasury Department auctioned \$33 billion in 3-month bills in denominations of \$10,000 at a discount rate of 6.300%. What would be the effective rate of interest? (Use calendar year. Do not round intermediate calculations. Round your answer to the nearest hundredth percent.) Effective rate of interest
On May 12, Scott Rinse accepted an \$10,5.00, 13%, 90-day note for a time extension of a bill for goods bought by Ron Prentice. On June 12, Scott discounted the note at Able Bank at 12%. (Use Days in a year table.) What proceeds does Scott receive? (Use 360 days a year. Do not round intermediate calculations. Round your final answer to the nearest cent.) Proceeds received

(a) Interest = \$7,540 * 0.082 * 270/360 = \$463.71

Proceed = \$7,540 - 463.71 = \$7,076.29

(b) Effective interest rate = 463.71 / (7,076.29 X 270/360) = 8.73%

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