Calculate Bank Discount (Interest), Proceeds, and Effective RateC. Face value =$4,000Rate=9%Term=1 Year

Question

asked Sep 26, 2023 157k views

1 Answer

Shahar Galukman · Answer 1 · 2023-10-01T07:24:33+0000

c.

Bank discount:

$Bank\text{ }Discount=4000*(9)/(100)*1year$

As the time is in years you don't need to divide the dime into 360

$Bank\text{ }discount=4000*0.09*1=360$

Proceeds:

Effective rate:

$Effective\text{ }rate=(360)/((3640*1))=(360)/(3640)=0.0989$