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Bank discount look at the file please to answer questions

Bank discount look at the file please to answer questions-example-1

1 Answer

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Given:
Bank discount formula:
Interest/Discount = Face Value/Principal * Rate * term

Maturity Value = Face Value/Principal

Proceeds = Maturity Value - Bank Discount

2) Face Value = 9,700 ; Discount Rate = 9.5% ; Term = 135 days
Discount = 9,700 * 0.095 * 135/360
Discount = 345.56
Proceeds = 9,700 - 345.56 = 9,354.44

3) Face Value = 15,600 ; Discount rate = 7.25% ; Term = 270 days
Discount = 15,600 * 0.0725 * 270/360
Discount = 848.25

4) Proceeds = 15,600 - 848.25 = 14,751.75
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