Question

6. A man makes a simple discount note with a face value of $2,300, a term of 140 days, and an 18% discount rate. Find the discount. (Use the banker’s rule.)

Answer 1

$158.562

Explanation:

Data provided in the question:

Face value = $2,300

Period of discount = 140 days = 140 / 365 = 0.383 years

Discount rate = 18% = 0.18

Now,

the discount can be calculated using the relation

Discount = face value × discount rate × Period.

Discount = $2,300 × 0.18 × 0.383

Discount = $158.562

Hence, the discount is $158.562