Question

Roni Lockard signed a $29,500 simple discount promissory note at a certain bank. The discount rate was 14%, and the note was made on February 12 (not in a leap-year) for 115 days. What proceeds (in $) will Roni receive on the note?

Answer 1

Roni Lockard will receive $28,234.79 on the promissory note.

Step-by-step explanation:

To calculate the proceeds Roni Lockard will receive on the promissory note, we need to use the formula:

Proceeds = Face Value - Discount

In this case, the face value of the note is $29,500. The discount rate is 14%, and the note is made for 115 days. To calculate the discount, we can use the formula:

Discount = Face Value * Discount Rate * Time

Substituting the given values, we have:

Discount = $29,500 * 0.14 * (115/365)

Simplifying the calculation, we find:

Discount = $1265.21

Therefore, the proceeds Roni will receive on the note will be:

Proceeds = $29,500 - $1265.21 = $28,234.79