Escolar Documentos
Profissional Documentos
Cultura Documentos
Objective 1
2 of 2
Objective 2
Bank Discount
B = MDT
Maturity Value
$2000
6% discount rate
90 days
Discount Rate
$30 discount
Time (years)
$1970 proceeds
Sample
B = MDT
B = $800 x .045 x 120/360
B = $12
$800
4.5% discount rate
120 days
12
$______
discount
Proceeds
P=M-B
P = $2000 - $30
P = $1970
$2000
6% discount rate
90 days
$30 discount
$1970 proceeds
Sample
P=M-B
P = $800 - $12
P = $788
$14,250.
The banker discounts the 8 month note at
8%.
Discount = _______
Proceeds = _______
B = 14,250 x 0.08 x 8/12 =
P = 14,250 760 =
B = MDT
P=M-B
$760
$13,490
Discount = _______
Proceeds = _______
B = 1,250 x 0.11 x 150/360 = 57.29
P = 1,250 57.29 = $1,192.71
B = MDT
P=M-B
Objective 3
Proceeds received by
the borrower.
P
M
1 DT
Time of the loan (years)
5800
180
1 .0575
360
M $5,971.69
P
M
1 of 2
1 DT
120,000
80
1 0.095
360
120,000
1 0.021111
120,000
$122,587.97
0.9788888
P
M
2 of 2
1 DT
720,000
1 0.015
720,000
$730,964.47
0.985
Objective 4
Simple
I = PRT
B = MDT
I = $175
B = $175
$3,000
$2,825
I
R
PT
R
175
10
2825
12
R 0.0743
R 7.4%
Sample
$3000
5.8%
75 days
$3000
5.8%
75 days
I
R
PT
36
.25
36.36
25
.25
R
75
2963
PT
.
75
T
2963.75
360
R 5.87%
Effective Rate
of Interest
10,964.47
R
45
720,000
360
R 0.1218
I
PT
R 12.2%
Practice