A holder of a $19,200, 10%, 240-day note dated June 1 decides to sell the note at a discount. The note is sold on July 18 at a discount of 11%. Find the proceeds.
A) $19,272.25
B) $19,265.99
C) $19,382.04
D) $19,036.36

Question

Quizplus · Accepted Answer

The proceeds of the note are calculated as follows:Proceeds = Face value - DiscountDiscount = Face value x Discount rate x TimeTime = (Number of days between sale date and maturity date) / 360Discount = $19,200 x 0.11 x (240 - 18) / 360Discount = $19,200 x 0.11 x 222 / 360Discount = $19,200 x 0.11 x 0.6167Discount = $1,344Proceeds = $19,200 - $1,344Proceeds = $19,272.25

A Holder of a $19,200, 10%, 240-Day Note Dated June