1-If a note is discounted at 14% for 4 years, what is the equivalent interest rate?

A. 8.97%

B. 3.18%

C. 3.5%

D. None of these

Find the maturity value, the proceeds the amount of discount, if you give me SR 20 today, I will pay you back SR 25 next Tuesday.

A. SR 20, SR 25, SR 5

B. SR 5, SR 20, SR 25

C. SR 25, SR 20, SR 5

D. SR 25, SR 5, SR 20

$5,000 face value note has a term of 210 days. The simple discount rate is 10%. Find the proceeds of the note.

A. SR 291.67

B. SR 4,708.33

C. SR 5,291.67

D. None of these

To find out the proceeds, you will use the formula

A. P = FV/(1 - dt)

B. P = FV(1 + dt)

C. P = FV(1 - dt)

D. P = FV(1 d/t)