The face value of a note is $7,000 with an interest rate of 11%. The time is based on 90 days in a 360-day year, and the loan was taken out on February 11 in a nonleap year. The note has been discounted 14% on March 10. What are the proceeds?
A) $1,285.42
B) $1,293.53
C) $7,016.28
D) $7,360.33

Question

Quizplus · Accepted Answer

The proceeds are calculated by first finding the maturity value using the formula: Maturity Value = Face Value + (Face Value * Interest Rate * Time/360). Then, calculate the discount using the formula: Discount = Maturity Value * Discount Rate * Time/360. Finally, subtract the discount from the maturity value to find the proceeds.

The Face Value of a Note Is $7,000 with an Interest