Decorative Floors Received a $1,200 Promissory Note at 10

question 66

Short Answer

Decorative Floors received a $1,200 promissory note at 10.5% simple interest for 4 months from one of its customers. After 1 month, the note was discounted at the Riverview Bank at a discount rate of 14%. What are the proceeds Decorative Floors will receive from the discounted note? Use ordinary interest.

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Definitions:

Gross Profit

The difference between revenue and the cost of goods sold, before deducting overheads, salaries, and other operating expenses.

Net Income

After deducting taxes and expenses from its revenues, the resultant profit of a company.

Dividends

Cash payouts from a firm to its equity holders, usually derived from the company's financial gains.