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Actuarial Science Mathematics of Finance Discounted Value 6. For cach promissory note in the following table, determine the maturity date, maturity value, dis- counted period, and the proceeds. No.Da...

6. For cach promissory note in the following table, determine the maturity date, maturity value, dis- counted period, and the

Actuarial Science Mathematics of Finance Discounted Value

6. For cach promissory note in the following table, determine the maturity date, maturity value, dis- counted period, and the proceeds. No.Date of Note Face ValueInterest on NoteTermDate of Discount Interest Rate for Discounting Nov.3 $3000 None Dec.1 3 months $500 Dec.24 192 days 7.00% 2 Dec.14 7.0%
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Answer #1

No 1 -

Maturity date - February 3rd,

Maturity Value - $3000

Discounted Period - 64 days

Proceeds - $3000 - $53.92 (3000 * 10.25% * 64/365) = $2946.08

No 2 -

Maturity date - June 23rd

Maturity Value - $518.41 ($500 + $18.41 (500 * 7% * 192/365))

Discounted Period - 182 days

Proceeds - $518.41 - $18.09 ($518.41 * 7% * 182/365)

Note - Total no of days for year considered as 365 days

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