A borrower has two alternatives for a loan: (1) issue a $480,000, 60-day, 8% note or (2) issue a $480,000, 60-day note that the creditor discounts at 8%. (Assume a 360-day year is used for interest computations.) a. Compute the amount of the interest expense for each option. for alternative (1) for alternative (2) b. Determine the proceeds received by the borrower in each situation. proceeds proceeds Alternative 1 Alternative 2

A borrower has two alternatives for a loan: (1) issue a $480,000,60-day, 8% note or (2) issue a $480,000,60-day note that the creditor discounts at 8%. (Assume al 360-day year is used for interest computations.) a. Compute the amount of the interest expense for each option. for alternative (1) for alternative (2) b. Determine the proceeds recelved by the borrower in each situation, Alternative 1 proceeds Alternative 2 proceds