The Face Value of a Simple Discount Note Is $12,000

question 99

Short Answer

The face value of a simple discount note is $12,000. The discount is 6½% for 90 days. Use ordinary interest. Calculate the following:
A. Amount of interest charged for each note
B. Amount borrower would receive
C. Amount payee would receive at maturity
D. Effective rate (to the nearest tenth percent)

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