Able Co. accepted a $20,000 note on March 10 with terms of 6%, 60 days. Able Co. discounted the note on March 20, at the Green Bank at 7%. Use ordinary interest. What net proceeds did Able receive?

Question

Quizplus · Accepted Answer

20,000 × .06 × 60/360 = $200; MV = 20,000 + 200 = $20,200; Days left = 60 - 10 = 50 days; Bank charge = $20,200 × .07 × 50/360 = $196.39; Proceeds = $20,200 - $196.39 = $20,003.61.

Able Co Accepted a $20,000 Note on March 10 with Terms