A. Using the Simple Discount Note formula:
Proceeds = Maturity Value (MV) - Discount; MV = Face Value
Discount = MdT; M = Maturity; d = discount; T = Time
= $12,300*12%*15/12
Discount = $1,845
Proceeds = MV - Discount
= $12,300 - $1,845
Proceeds = $10,455
B. Using the Simple Interest Note formula:
Effective Rate of Interest = Interest / Proceeds*Time
= $1,297.50 / $17,300*180/360
= .15
Effective Rate of Interest = .15 or 15%
C. False. Discount is the interest charged to the principal of the loan.
Seems to me that if you need help your brain isn’t rlly all that good...i’m good with my brain thanks!
74,000 is your answer
Hope this helps
