A $4,800, 10% note dated June 2 for 90 days was discounted on August 19 at 13%. The number of days in the discount period is 15 days.

Question

Quizplus · Accepted Answer

The discount period is the time between the discount date (August 19) and the maturity date of the note. Since the note is for 90 days starting from June 2, it matures on August 31. Therefore, the discount period is from August 19 to August 31, which is 13 days, not 15.

A $4,800, 10% Note Dated June 2 for 90 Days