Question
Carrie borrows $1000 from Sue on February 14, 2016 for 18 months at 8.5% simple interest. Then, 3 months before maturity, Sue sells the note
Carrie borrows $1000 from Sue on February 14, 2016 for 18 months at 8.5% simple interest. Then, 3 months before maturity, Sue sells the note to B. Harmless who discounts it based on a bank discount rate of 13.25%. How much did B. Harmless pay Sue for the note? What simple interest rate did Sue actually earn on the $1000 that she lent to Carrie for the time that she held the note?
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Credit Derivatives Handbook Global Perspectives Innovations And Market Drivers
Authors: Greg Gregoriou, Paul Ali
1st Edition
0071549528, 978-0071549523
