A borrower has two alternatives for a loan: (1) issue a $360,000, 60-day, 5% note or (2) issue a $360,000, 60-day note that the creditor discounts at 5%. Assume a 360-day year.

a. Calculate the amount of the interest expense for each option. $ ????? for each alternative.

b. Determine the proceeds received by the borrower in each situation.

(1) $360,000, 60-day, 5% simple-interest	$ ????
(2) $360,000, 60-day note discounted at 5%	$ ????