On June 11, Nathan, Inc. accepted a $8,000, 7%, 60-day note from a customer. On June 26, the company discounted the note at the bank at 10%. The proceeds amounted to

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Quizplus · Accepted Answer

The proceeds from discounting the note can be calculated by first finding the maturity value of the note, then subtracting the bank's discount. The maturity value includes the principal plus interest for the 60-day period. Interest on the note = $8,000 * 7% * (60/360) = $112. The maturity value is $8,000 + $112 = $8,112. The bank's discount is $8,112 * 10% * (34/360) (since the note is discounted 34 days before its maturity, from June 26 to July 30), which equals approximately $79.56. Therefore, the proceeds are $8,112 - $79.56 = $8,032.44. However, given the options provided, it seems there might have been a mistake in the calculation or in the interpretation of the options. The correct approach involves calculating the interest and discount correctly, but none of the provided options exactly match the expected result based on the standard formula. The closest to the expected calculation based on the provided options and typical calculation method is $7,992.16, acknowledging a discrepancy in the calculation steps outlined.