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Fudgin [204]
3 years ago
13

Tom wanted to compare what proceeds he would receive with a simple interest note versus a simple discount note. Both had the sam

e terms: $18,235 at 10% for 2 years. Use ordinary interest as needed.
a. Calculate the simple interest note proceeds.
b. Calculate the simple discount note proceeds.
Mathematics
1 answer:
Marrrta [24]3 years ago
3 0
A) Simple interest note proceeds are equal to the face value: $18,235.

b) Simple discount note proceeds are the face value less the inerest due,
.. $18,235(1 -0.10*2) = $14,588.
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