Assuming a 360-day year, proceeds of $48,415 were received from discounting a $49,529, 90-day note at...

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Assuming a 360-day year, proceeds of $48,415 were received from discounting a $49,529, 90-day note at...

Assuming a 360-day year, proceeds of $48,415 were received from discounting a $49,529, 90-day note at a bank. The discount rate used by the bank in computing the proceeds was

Select the correct answer.

a. 11%

b. 7%

c. 9%

d. 10%

business accounting

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Answer 1

Answer #1

Solution:

Face value of note = $49,529

Amount received = $48,415

Discount amount = $49,529 - $48,415 = $1,114

Period of note = 90 days

Discount rate = $1,114/$49,529*360/90 = 9%

Hence option c is correct.

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Answer 2

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Assuming a 360-day year, proceeds of $48,415 were received from discounting a $49,529, 90-day note at...

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