A 90-day promissory note with a face value of $500 000 is issued at a yield of 7.789% per annum.Calculate its price.
A) $379 971.77
B) $419 442.84
C) $490 578.08
D) $490 711.67

Question

Quizplus · Accepted Answer

The price of a promissory note can be calculated using the formula: Price = Face Value / (1 + (Yield * (Days to Maturity/365))). Plugging in the given values: Price = $500,000 / (1 + (0.07789 * (90/365))) = $490,578.08.

A 90-Day Promissory Note with a Face Value of $500