84 Chapter 2 Simple Discount
- Find the simple interest and simple discount rates for the loan illustrated by the following time line:
$17,357.19 $19,357.08
250 days- A $10,000 T bill with 130 days until maturity is sold with a 5.01% simple discount rate. Find the proceeds.
- Faryal sold a note with a $20,000 maturity value, with a $1575 discount. Find her proceeds.
- Alfi e loaned Betty $3,000 for 200 days at 11% simple interest. Thirty days later he sold the note to Gemma with a 15%
simple discount rate. How much did Gemma pay for the note? - Virginia borrowed $3,500 for 100 days from Matta National Bank at 8.43% simple interest. Twenty days later, the bank
sold the note to Po Financial at a 7¾% simple discount rate; 25 days after that the note was sold to NiVestment Corp
with a 9.26% simple discount rate. What simple interest rate did Virginia actually pay? - For the loan illustrated by the time line shown below, determine the (a) proceeds, (b) maturity value, (c) simple interest,
and (d) simple discount.
$25,000 $32,5005/7/08 12/4/10- A $50,000 maturity value note with 100 days till maturity is sold at a 4.44% simple discount rate. Find the proceeds.
- A $10,000 maturity value note is sold for $9,899.43 with a 6.57% simple discount rate. What is the note’s remaining term?
- A $10,000 maturity value note is sold for $9,899.43 with a 6.57% simple discount rate. What is the equivalent simple
interest rate? (Hint: Use the answer to Exercise 31.) - Jessamyn is due an $824.15 tax refund, which she expects to receive on April 30. On March 17 her tax preparer offered to
buy this refund by giving her $800 on the spot. What is the simple discount rate for this offer? What is the simple interest rate? - Austin is due to receive a commission check for $1,845.17 in 9 days. He needs cash now. A business associate offers to
give him cash now in exchange for the check when it is received. Austin would have to give up a fee of 1% of his check.
What is the simple interest rate equivalent to this offer? - Jersey Shore Financial Funding made a $10,000 loan to a small business for 300 days. The maturity value of the note
was $10,850. Fifty days later, Jersey Shore sold the note to the Bank of Shamokin Dam for $9,795. What rate of simple
discount was used for this secondary sale? What simple interest rate did the original lender earn?