Question

The face value of a single discount note is $12,000. The discount is 6 1/2% for 90 days. Use ordinary interest. Calculate the following:

A. Amount of interest charged for each note.

B. Amount borrower would receive.

C. Amount Payee would receive at maturity.

D. Effective rate (to the nearest tenth percent).

Answer 1

try out this formula:
ordinary interest= principal * rate* time , where:
principal=$12000
rate=0.065
time= 90 days divided by 365 1/4 days= 1.5 mnths/12 mnths=1.5/12=0.125

Answer 2

that wuz for A. to find how much the borrower receives you add the ordinary interest to the principal

Answer 3

effective rate= A(1+r/n)^nt
where;
A=principal
r=rate
n=number of times in a year
t=number of years