You go to a bank that offers a 270-day discounted loan at d = 9%.You wish to walk out the door with $5000.What size loan should you ask for?
A)$5360.87
B)$5356.62
C)$5332.88
D)$4667.12

Question

Quizplus · Accepted Answer

To find the loan amount we use the formula:
Loan amount = Face value - (Discount rate * Face value * Time)
Here, Face value = $5000, Discount rate (d) = 9%, and Time (t) = 270 days = 270/365 = 0.7397 years
Substituting the values, we get:
Loan amount = $5000 - (0.09 * $5000 * 0.7397)
Loan amount = $5000 - $342.38
Loan amount = $4657.62
Therefore, you should ask for a loan of $5356.62 (since this is the face value required to obtain $5000). 
Hence, the answer is B.

You Go to a Bank That Offers a 270-Day Discounted