Question

Juan Solez, a prominent painter, takes out a simple discount note for one year from River National Bank for $5,000. The annual rate of interest is 8%. What's the amount of the discount and the proceeds?

Answer 1

Given that Juan Solez, a prominent painter, takes out a simple discount note for one year from River National Bank for $5,000.

Annual rate of interest on that amount is 8%.

Now we have to find about what is the amount of the discount and the proceeds.

Amount of discount will be just 8% of 5000

0.08 ( 5000 )= $400

Proceeds will be difference of original amount and discount so that will be 5000-400= $4600