A 60-day note dated April 1 was turned over to the bank for discounting on April 21. The number of days used in computing the dollar amount of the discount is
A) 20.
B) 40.
C) 60.
D) 30. 20 days had elapsed from April 1 to April 21.

Question

Quizplus · Accepted Answer

The number of days used in computing the dollar amount of the discount is the number of days between the date the note was discounted and the date it matures, which is 60 days in this case. However, since the note was turned over for discounting on April 21, only 40 days are left until maturity. Therefore, the discount will be calculated based on 40 days. So, the answer is B.

A 60-Day Note Dated April 1 Was Turned Over to the Bank