ANSWER:
you would have to decide whether you want to receive $39,590.25 at the end of 6 months as per the terms of the simple interest note or receive $35,819.75 upfront as per the terms of the simple discount note.
_______________________________________________________________
SOLUTION:
The difference between a simple interest note and a simple discount note is that in a simple interest note, interest is calculated on the principal amount, while in a simple discount note, the interest is deducted from the principal amount upfront.
Assuming the interest rate is 10% per annum, the interest payable on $37,705 for 6 months would be:
Simple Interest = (Principal x Rate x Time) / 100
= ($37,705 x 10% x 6/12) / 100
= $1,885.25
the total amount payable at the end of 6 months for a simple interest note would be:
Principal + Interest = $37,705 + $1,885.25 = $39,590.25
For a simple discount note, the interest is deducted from the principal upfront, so the amount payable would be:
Amount Payable = Principal - Discount
= $37,705 - ($37,705 x 10% x 6/12)
= $37,705 - $1,885.25
= $35,819.75