70.2K

Verified Solution

Link Copied!

PART A:

PART B:

PART C:

Use the ordinary interest method, 360 days, to solve the following word problem. Round to the nearest cent when necessary. Roni Lockard signed a $28,500 simple discount promissory note at a certain bank. The discount rate was 13%, and the note was made on February 12 (not in a leap-year) for 115 days. (a) What proceeds (in $) will Roni receive on the note? $ 1183.5 x (b) What is the maturity date of the note? June 6 The following interest-bearing promissory note was discounted at a bank by the payee before maturity. Use the ordinary interest method, 360 days, to calculate the missing information. (Round dollars to the nearest cent.) Face Value Interest Rate (%) Date of Note Term of Note (days) Maturity Date Maturity Value (in $) $750 14. 2 June 6 135 ---Select--- Date of Discount Discount Period (days) Discount Rate (%) Proceeds (in $) Sept. 5 17.5 You are the accounting manager for Kool Ragz, Inc., a manufacturer of men's and women's clothing. The company needs to borrow $1,300,000 for 90 days in order to purchase a large quantity of material at "closeout" prices. The interest rate for such loans at your bank, Rimrock Bank, is 14% using ordinary interest. (a) What is the amount (in $) of interest on this loan? $ 45500 (b) After making a few "shopping" calls, you find that Southside National Bank will lend at 14% using exact interest. What is the amount (in $) of interest on this offer? (Round your answer to two decimal places.) $ 44877 X (c) So that it can keep your business, Rimrock Bank has offered a loan at 13.5% using ordinary interest. What is the amount (in $) of interest on this offer? $ 43875 (d) (Challenge) If Southside National wants to compete with Rimrock's last offer (part c) by charging $1,875 less interest, what rate (as a %), rounded to the nearest hundredths of a percent, must it quote using exact interest? 13.1028 %

Answer & Explanation Solved by verified expert

See Answer