Steadman's Computer endorses a customer's note dated June 17 to the bank on August 6.The interest rate on the note is 10%,and the bank discount rate is 12%.The note matures on September 6.The discount period is:
A)31 days.
B)60 days.
C)81 days.
D)0 days.

Question

Quizplus · Accepted Answer

The discount period is the time between the endorsement date (August 6) and the maturity date (September 6). That is a total of 31 days. The bank discount rate of 12% is not used to calculate the discount period, but rather to calculate the amount that the bank will pay for the note (which is less than the face value).

Steadman's Computer Endorses a Customer's Note Dated June 17 to the Bank