What are the proceeds of a note for $5,500 at a discount rate of 8%, for 30 months?
A) $1,100
B) $4,400
C) $6,600
D) $7,700

Question

Quizplus · Accepted Answer

The proceeds of a note are calculated by subtracting the discount from the face value. The discount is found by multiplying the face value ($5,500) by the discount rate (8%) and the time period in years (30 months = 2.5 years). Discount = $5,500 * 8% * 2.5 = $1,100. Proceeds = Face Value - Discount = $5,500 - $1,100 = $4,400.

What Are the Proceeds of a Note for $5,500 at a Discount