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

Question

Question

Bill Blank signed an $7,540 note at Citizens Bank. Citizens charges a 8.2% discount rate. Assume the loan is for 270 days.

You were offered the opportunity to purchase either a simple interest note or a simple discount note with the following terms

On Sept. 12, Sheffield Company discounted at Sunshine Bank a $7,520 (maturity value), 142-day note dated June 12. Sunshines

The Treasury Department auctioned $33 billion in 3-month bills in denominations of $10,000 at a discount rate of 6.300%. What

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

Answer 1

Answer #1

Answer-1:

(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%

Answer 2

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