OLENTOT AND MEDISCOUNT Solution We hare $ 25000, r = 0.038. February 25, 2014, to September 30, 2014, is 31 week, which in this case is 31 x 7 217 days discount ret 217 days $25000 0 217 days P=511 + 1 = $250001 +0.038 $24 44768 The investor will pay $2444768 for the bill and receive $25000 in 217 days time EXAMPLES AT bill with a face value of $100 000 and issued on August 5, 2014, with a matu rity date of November 4, 2014 is purchased for $99 250 What rate of interestis Salution We luve 5 - 100000, P = 99 250. August 5, 2014 to November 4, 2014 is 13 weeks. or 13 x 7-91 days. We calculate 0030309741 = 3.03% 99250 750 EXERCISE 1.2 For each promissory note in problema 104 determine the maturity date, maturity valur, discount period, and the proceeds Date of Interest Rate Date of Interest Rate Note Face Value on Note Term Duct for Discounting 1 No. 53000 None 3 months Dec 1 10.25% 2 $1200 60 days Oct 2 4,75% Dec 14 $ 500 90 192 days Dec 24 7.00% 1 14000 Sione 2 month Mat1 RSCHE Sept 1 5. A day note promises to pay Ms. Chiu .000 plus simple interest at Ahe 51 days it is Bol to a bank that discounts notes at 12% me interest How much money does Ms Chie meel What does Ms. Cal reale her investment dWluta af Interest will the bank telte the notes paid in full in exactly dayal 6. Antstolis $5000 and actresa pornissexy note post repayment of the loun in 90 days with 8.5 simple interest. This notes mediately sold to a bank that charges simple interest. How much does the bank pay for the nel What is the investor's profil Wha the banks poolt on this investment when the notemates? 6. An investor lends $5000 and receives a promissory note promising repayment of the loan in 90 days with 8.5% simple interest. This note is immediately sold to a bank that charges 8% simple interest. How much does the bank pay for the note? What is the investor's profit? What is the bank's profit on this investment when the note matures