A 7-Month Note Dated May 1, 2014 Is Made at 3.75

question 65

Essay

A 7-month note dated May 1, 2014 is made at 3.75% for $3705. What is the present value of the note on September 4, 2014, if money is worth 6.87%?

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Definitions:

Semiweekly Schedule Depositor

A designation for businesses that must deposit payroll taxes on a semiweekly basis, determined by the amount of their tax liability.

Payroll Tax Liability

The obligation of employers to withhold and pay taxes on behalf of their employees, such as social security and Medicare taxes.

Authorized Depository

A financial institution authorized to accept deposits from individuals and businesses.

Form 941

Form 941 is a quarterly tax form that employers use to report income taxes, social security tax, or Medicare tax withheld from employees' paychecks.