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A company received in payment for merchandise sold an interest-bearing note with a face amount of $1,000, an annual interest rate of 16 percent, and
A company received in payment for merchandise sold an interest-bearing note with a face amount of
$1,000, an annual interest rate of 16 percent, and a term of six months. The company sold this note to a
local bank, at a discount rate of 15 percent, when the note had 60 days remaining to maturity. The cash
proceeds from the discounted note amounted to (assume 360 days per year):
A. $1,080
B. $1,053
C. $1,010
D. $975
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