Question

Paul and Sandy Moede signed an $8,000 note at Citizen’s Bank. Citizen’s charges a 6.50% discount rate. Assume the loan is for 300 days.

a) $7,520
b) $7,520.65
c) $8,450
d) $8,450.65

Answer 1

Paul and Sandy Moede will have to pay back $7,479.45 on their $8,000 note at Citizen’s Bank.

Step-by-step explanation:

To calculate the amount Paul and Sandy Moede will have to pay back on their $8,000 note at Citizen’s Bank, we need to calculate the discount amount and subtract it from the original note. The discount amount can be found by multiplying the note amount by the discount rate and the time period in years:

Discount amount = $8,000 × 6.50% × 300/365 = $520.55

To find the final amount to be paid back, we need to subtract the discount amount from the original note amount:

Final amount = $8,000 - $520.55 = $7,479.45

Therefore, the correct answer is option a) $7,520.