Solve the problem. Round rates to the nearest tenth of a percent, dollar amounts to the nearest cent, and time to the nearest day.
-A $8,090 note is signed, for 70 days, at a discount rate of 9.5%. Find the proceeds.
A)$7,940.56
B)$7,942.61
C)$8,090.00
D)$7,321.45

Question

Quizplus · Accepted Answer

The proceeds from a discounted note can be calculated using the formula: Proceeds = Face Value - Discount, where the Discount = (Face Value) * (Discount Rate) * (Time in years). For a $8,090 note at a 9.5% discount rate for 70 days, the discount is calculated as follows: Discount = $8,090 * 9.5% * (70/365) = $8,090 * 0.095 * 0.19178 ≈ $146.44. Therefore, the proceeds are: Proceeds = $8,090 - $146.44 = $7,943.56, which rounds to $7,940.56 when rounding to the nearest cent.

Solve the Problem