Commercial Paper with a Face Value of $1,000,000 Issued at a Discount

question 51

Multiple Choice

Commercial Paper with a face value of $1,000,000 issued at a discount rate of 7.5% simple interest has a term of 360 days. At what price was it issued?

• A) $944,736
• B) $1,000,000
• C) $925,000
• D) $1,073,973
• E) $931,122

---

Definitions:

Disposable Income

The financial resources that households have at their disposal for spending and saving after income tax deductions.

Savings

Money set aside for future use rather than spending immediately, often in accounts designed for long-term growth or security.

Disposable Income

Post-tax income households possess for saving or spending purposes.

Disposable Income

Disposable income refers to the sum of money that families can use for expenditures and savings once income taxes are deducted.