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On May 12, Bob Campbell Accepted a $5,000 Note in Granting

Question 64

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On May 12, Bob Campbell accepted a $5,000 note in granting a time extension of a bill for goods bought by Rick Ween. Terms of the note were 8% for 120 days. On July 8, Bob needed to raise cash and discounted the note at Rick's bank at a discount rate of 9%. Calculate Bob's proceeds. Use ordinary interest.

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$5000 × .08 × 120/360 = $133.3...

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