Varsity Press, a publisher of college textbooks, received a $70,000 promissory note at 12% ordinary interest for 60 days from one of its customers, Reader's Choice Bookstores. After 20 days, Varsity Press discounted the note at the Grove Isle Bank at a discount rate of 14.5%. The note was made on March 21.

a. What was the maturity date of the note?

b. What was the maturity value of the note?

c. What was the discount date of the note?

d. What proceeds did Varsity Press receive after discounting the note?

You are the accountant for Suite Dreams, a retail furniture store. Recently, an order of sofas and chairs was received from a manufacturer with terms of 3/15, n/45. The order amounted to $230,000, and Suite Dreams can borrow money at 13% ordinary interest.

a. How much can be saved by borrowing the funds for 30 days to take advantage of the cash discount? (Remember, Suite Dreams must borrow only the net amount due after the cash discount is taken.)

b. What would you recommend?