First, find the initial proceeds of the simple discount note. Then, find the discount period, the discount, and proceeds after discounting.
-Date Loan Was Made: Jan. 25 Maturity Value: $10,000
Length of Loan: 90 days
Rate: 10%
Date of Discount: Mar. 23
Discount %: 10%
A)Initial Proceeds: $9,750.00;
Discount Period: 58 days;
Discount: $183.33;
Proceeds After Discount: $9,825.00
B)Initial Proceeds: $9,750.00;
Discount Period: 33 days;
Discount: $91.67;
Proceeds After Discount: $9,908.33
C)Initial Proceeds: $9,750.00;
Discount Period: 33 days;
Discount: $183.33;
Proceeds After Discount: $19,908.33
D)Initial Proceeds: $9,750.00;
Discount Period: 33 days;
Discount: $91.67;
Proceeds After Discount: $19,908.33

Question

Quizplus · Accepted Answer

The initial proceeds are calculated by subtracting the simple interest (10% of $10,000 for 90 days) from the maturity value, resulting in $9,750. The discount period is from Mar. 23 to the maturity date, which is 33 days. The discount is calculated as 10% of $9,750 for 33 days, resulting in $91.67. Thus, the proceeds after discounting are $9,750 - $91.67 = $9,658.33, but due to a mistake in all options regarding the final proceeds calculation, the closest correct option based on the provided steps is B.

First, Find the Initial Proceeds of the Simple Discount Note