Question

determine the proceeds of a 10year promissory note discounted after after 4 years at 6% compounded quarterly with a maturity value of $6000​

Answer 1

The Proceeds of maturity after 10 years is $1613.4

Explanation:

Given as :

The maturity value = $ 6000

The rate applied at 6 % compounded quarterly

The Time period = 4 years

Now,

Amount = Principal ×
`(1+(\textrm Rate)/(4* 100))^(\textrm 4* Time)`

Or, Amount = 6000 ×
`(1+(\textrm 6)/(4* 100))^(\textrm 4* 4)`

Or, Amount = 6000 ×
`(1.015)^(16)`

Or, Amount = 6000 × 1.2689

∴ Amount = $ 7613.4

So, The proceeds after 10 years = $ 7613.4 - $ 6000 = $ 1613.4

Hence The Proceeds of maturity after 10 years is $1613.4 Answer