Marble Company discounts a customer's 8%, $4,000, 90-day note dated April 1, on May 15. The discount period is 45 days, and the bank discount rate is 15%. The maturity value of the note is $4,080. The bank discount is: (Use a 360-day year. Do not round any intermediate calculations. Round your final answer to the nearest dollar.)
A) $10.
B) $153.
C) $77.
D) $80.

Question

Quizplus · Accepted Answer

The bank discount is calculated as follows:Bank discount = Face value of note × Discount rate × Discount period / 360 daysBank discount = $4,000 × 15% × 45 days / 360 days= $4,000 × 0.15 × 45 / 360= $4,000 × 0.075= $300The maturity value of the note is $4,080, which means that the bank discount is $4,080 - $4,000 = $80.

Marble Company Discounts a Customer's 8%, $4,000, 90-Day Note Dated