The Simple Interest Note Was Discounted at 15

question 13

Multiple Choice

The simple interest note was discounted at 15%. Find the discount period in days and the proceeds.
-Loan made: Apr 18
Face value: $400
Length of loan: 150 days
Rate: 11%
Date of discount: June 18

• A)90 days, $406.83
• B)89 days, $384.49
• C)89 days, $402.82
• D)90 days, $388.50

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Definitions:

Current Ratio

A liquidity ratio that measures a company's ability to pay short-term and long-term obligations.

External Financing Need

The gap between the funding a firm needs for its operations and investments, and the amount it can generate internally, implying the need to seek external funding.

Projected Growth Rate

An estimate of the rate at which a company's earnings or revenues are expected to grow in the future.

Sales Increases

A measurement of the rise in a company's sales over a specific period, indicating growth in business operations.