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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Definitions:

Undue Influence

A legal term referring to a situation where an individual is able to persuade another's decisions due to the relationship between the two parties being such that one is dominant over the other.

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An American film studio and a division of Walt Disney Studios, known for producing both animated and live-action features.

Scienter

A legal term that refers to the knowledge of wrongdoing or false representation, implying a degree of intent in fraudulent acts.

Contrast Effect

A cognitive bias where the evaluation of something is influenced by comparisons with recently encountered contrasting objects or events.