Jone Corporation accepted a $25,000, 8%, 120-day note on July 8. Jone discounted the note on September 4, at Rool Bank at 7%. What proceeds did Jone receive? Use ordinary interest.

Question

Quizplus · Accepted Answer

MV = 25,000 × .08 × 120/360 = 666.67 + 25,000 = 25,666.67; Days left = 120 - 58 = 62; Bank Discount = 25,666.67 × .07 × 62/360 = 309.43; Proceeds = 25,666.67 - 309.43 = $25,357.224.

Jone Corporation Accepted a $25,000, 8%, 120-Day Note on July