Question

A $2850, five-month promissory note with interest at 6.15% is issued on June 1, 2019. Compute the proceeds of the note on August 13, 2019 when money is worth 7.5%

Answer 1

Proceeds = $2875.86

Explanation:

- Legal due date: November 4

- Interest period: June 1 – November 4 = 156 days

S = P(1 + r*t) = 2850( 1 + 0.0615*156) = $2924.91

Proceeds:

Interest period: August 13 – November 4 = 83 days

P = ( = = $2875.86

Proceeds = $2875.86