Find the maturity date and proceeds. Round to the nearest cent.
-Face value: $4,500
Discount rate: 9%
Date made: May 30
Time: 90 days
Maturity date: Proceeds:
A)Maturity date: August 28 Proceeds: $4,601.25
B)Maturity date: August 28 Proceeds: $4,398.75
C)Maturity date: August 30 Proceeds: $4,601.25
D)Maturity date: August 30 Proceeds: $4,398.75

Question

Find the maturity date and proceeds. Round to the nearest cent.
-Face value: $4,500
Discount rate: 9%
Date made: May 30
Time: 90 days
Maturity date:  Proceeds: 
A)Maturity date: August 28 Proceeds: $4,601.25 
B)Maturity date: August 28 Proceeds: $4,398.75 
C)Maturity date: August 30 Proceeds: $4,601.25 
D)Maturity date: August 30 Proceeds: $4,398.75

Quizplus · Accepted Answer

To find the maturity date, we need to add the time (90 days) to the date made (May 30), which gives us August 28. To find the proceeds, we use the formula: Proceeds = Face Value - Discount, where Discount = (Face Value)(Discount Rate)(Time in days/360). 
Plugging in the given values, we get:
Discount = (4500)(0.09)(90/360) = $101.25
Proceeds = 4500 - 101.25 = $4,398.75 
Therefore, the answer is B.

Find the Maturity Date and Proceeds