Question

Loan date June 14, face value $5000, length of loan 100 days, rate 10%, discount date Aug. 7. The note was discounted at 16%. Find the proceeds.

Answer 1

4594.52

Explanation:

First, we need to calculate the time from the loan date to the discount date. The loan date is June 14 and the discount date is August 7, so there are 54 days between the two dates.

Next, we need to calculate the discount. The discount is equal to the face value of the loan times the discount rate times the time to maturity divided by 365. In this case, the discount is equal to $5000 * 16% * 54 days / 365 = $405.48.

Finally, we need to subtract the discount from the face value of the loan to find the proceeds. The proceeds are equal to $5000 - $405.48 = $4594.52.

So the answer is 4594.52