The Mathematics of Money

Brittany bought a discount bond issued by the State of California with a maturity value of $20,000. The discount rate was 3.19% ...

If you are due a tax refund of $875.39 in 50 days and your tax preparer offers to give you $850.00 now in exchange for your ref ...

64 Chapter 2 Simple Discount There is no way of knowing this for sure from the information given. We could look at this as simpl ...

Copyright © 2008, The McGraw-Hill Companies, Inc. Even though the simple interest rate will always be higher, it does seem reaso ...

66 Chapter 2 Simple Discount On the other hand, if we look at this note as simple interest: I  PRT $600  ($9,400)(R)(9/12) $60 ...

Whether or not it is worth paying $15.00 out of $750.00 to get your cash sooner is of course a personal decision, depending enti ...

68 Chapter 2 Simple Discount The payments exchanged by a borrower and lender are as illustrated in the timeline below: $352.45 ...

Copyright © 2008, The McGraw-Hill Companies, Inc. 1.4 Time Value of MoneyExercises 2.2 69 69 Algernon has just learned that his ...

70 Chapter 2 Simple Discount The Gorham Widget Corporation will receive a payment of $1.8 million (i.e. $1,800,000) for a large ...

Copyright © 2008, The McGraw-Hill Companies, Inc. 2.3 Secondary Sales of Promissory Notes Suppose that you borrow $1,000 from Fr ...

72 Chapter 2 Simple Discount exists is being sold. The simple interest loan that created this note is water under the bridge. It ...

Copyright © 2008, The McGraw-Hill Companies, Inc. Secondary sale: The remaining term is 235  74  161 days. D  MdT D  ($1,039 ...

74 Chapter 2 Simple Discount (b) Though we already know that the price Ringo paid for the note was found with a 7¾% simple disco ...

Copyright © 2008, The McGraw-Hill Companies, Inc. Example 2.3.5 Find the simple interest rate that Chance actually earned in Exa ...

76 Chapter 2 Simple Discount When dealing with problems with this much complexity, never try to rush through things. It is tempt ...

Harry borrowed $5,255 from Ron for 200 days at a simple interest rate of 12.25%. Then, 80 days later, Ron sold the note to Herm ...

In Exercise 4, fi nd the actual simple interest rate (a) paid by Estimable Comestibles, (b) earned by Allegany Federal Credit U ...

Emerson loaned Lake $29.375 for 180 days at a 8¼% simple interest rate. Thirty days later he sold the note to Palmer at a 7^1 ⁄ ...

80 CHAPTER 2 SUMMARY Topic Key Ideas, Formulas, and Techniques Examples The Concept of Discount, pp. 5 6 –5 7 Discount is subtr ...

Copyright © 2008, The McGraw-Hill Companies, Inc. Topic Key Ideas, Formulas, and Techniques Examples Measuring Actual Interest E ...