Question

Please help. Please provide answer and formula.

Styles Paragraph LU 11-2 Dase of Agil 10 540.000 Jene 10 CHAPTER ORGANIZER AND STUDY GUIDE WITH CHECK FIGURES FOR EXTRA PRACTICE QUIZZES Key polet, procedore, formals Examplels) to ilustrate situation Topic Simple discount note p280 count- MV x iscount x Time $6.000 09瓃.seo leterest based on amount paid back and and pays back 56,000 at maturity ahe not what ceived 60 days A Treasury bill is a good esample of smole oncount note ae $10,000 note, discount rate 12% to 60 days Effective rae p2 2 -$200 What borrower ces Face value Dscount -1224% 9 800 Amount brrower receved Discounting an nerest-eaing noe, p 282 dated Novembr and diacote Deretter at 8% - 51 000 x 0$10 2: 30 4 $1.030 $1.003.27

Answer 1

Formula sheet

A	B	C	D	E	F	G	H	I
2		Ordinary Interest Note:
3		Date of Note	Face Value	Length of note (Days)	Interest rate	Bank Discount Rate	Date of discount
4		43565	40000	170	0.05	0.02	43626
5
6		a)
7
8		Interest	=Face Value*Interest rate*Time
9			=$40,000*5%*(170/360)
10			=D4*F4*(E4/360)	=D4*F4*(E4/360)
11
12		Maturity Value	=Face Value + Interest
13			=$40,000+$944.44
14			=D4+D10	=D4+D10
15
16		b)
17
18		Discount period is the period between the date of discount and the due date.
19
20		Date of discount	=H4
21
22		Date of note	=C4
23		Length of note	170	days
24
25		Due date	=Date of Note + Length of note
26			=D22+D23	=D22+D23
27
28		Discount period	=Due Date - Date of Discount
29			=D26-D20	=D26-D20
30
31		Hence Discounting period is	=D29	Days
32
33		c)
34
35		Bank Discount	=Maturity Value*Bank Discount Rate*(Discount Period / 360)
36			=$40,944.44*2%*(109/360)
37			=D14*G4*(D31/360)	=D14*G4*(D31/360)
38
39		Hence Bank Discount is	=D37
40
41		d)
42
43		Proceeds	=Maturity Value - Bank Discount
44			=$40,944.44 - $247.94
45			=D14-D39
46
47		Hence proceeds is	=D45
48