Question 1

The bank discount of an $18,000 non-interest-bearing, simple discount 8%, 90-day note is:

Accepted Answer

A)  $18,360
B)  $17,640
C)  $630
D)  $360
E)  None of theseF) B) and C)
G) A) and E)

Question 2

Compute bank discount using (A)ordinary interest, (B)proceeds, and (C)effective interest rate to the nearest hundredth. Do not round denominator in your calculation.
 $$\begin{array} { | c | c | c | } 
\hline \text { Face Value } & \text { Discount Rate } & \text { Time in Days } \
\hline \$ 9,000 & 14 \% & 110 \
\hline
\end{array}$$

Accepted Answer

A. $385; B...

Question 3

In calculating the bank discount when discounting an interest-bearing note, which one of the following is not used in the calculation?

Accepted Answer

A)  Principal proceeds
B)  Maturity value
C)  Bank discount rate
D)  Discount period
E)  None of theseF) A) and B)
G) A) and C)

Question 4

Lois Longin buys a $10,000 13-week Treasury bill at 11%. Use ordinary interest. What is her effective rate to nearest hundredth percent?

Accepted Answer

10,000 × .11 × 13/52...

Question 5

Morris Bank discounts a 100-day note for $6,000 at 11%. Find (A)bank discount and (B)proceeds. Use ordinary interest.

Accepted Answer

A. 6,000 × .11 × (10...

Question 6

On May 12, Joy Co. accepted a $1,000, 60-day, 6% note from Abe Wills, granting a time extension on a past-due account. Joy discounted the note at the bank at 9% on May 28. Use ordinary interest. Calculate Joy's proceeds.

Accepted Answer

1,000 × .06 × 60/360 = $10; MV...

Exam 11: Promissory Notes, Simple Discount Notes, and the Discount Process

The bank discount of an $18,000 non-interest-bearing, simple discount 8%, 90-day note is:

Correct Answer
verified

Morris Bank discounts a 100-day note for $6,000 at 11%. Find (A)bank discount and (B)proceeds. Use ordinary interest.

Correct Answer
verified
A. 6,000 × .11 × (10...
View Answer

In calculating the bank discount when discounting an interest-bearing note, which one of the following is not used in the calculation?

Correct Answer
verified

Lois Longin buys a $10,000 13-week Treasury bill at 11%. Use ordinary interest. What is her effective rate to nearest hundredth percent?

Correct Answer
verified
10,000 × .11 × 13/52...
View Answer

Correct Answer
verified
A. $385; B...
View Answer

On May 12, Joy Co. accepted a $1,000, 60-day, 6% note from Abe Wills, granting a time extension on a past-due account. Joy discounted the note at the bank at 9% on May 28. Use ordinary interest. Calculate Joy's proceeds.

Correct Answer
verified
1,000 × .06 × 60/360 = $10; MV...
View Answer

Exam 11: Promissory Notes, Simple Discount Notes, and the Discount Process

The bank discount of an $18,000 non-interest-bearing, simple discount 8%, 90-day note is:

Correct AnswerverifiedShow Answer

Morris Bank discounts a 100-day note for $6,000 at 11%. Find (A)bank discount and (B)proceeds. Use ordinary interest.

Correct AnswerverifiedA. 6,000 × .11 × (10...View AnswerShow Answer

In calculating the bank discount when discounting an interest-bearing note, which one of the following is not used in the calculation?

Correct AnswerverifiedShow Answer

Lois Longin buys a $10,000 13-week Treasury bill at 11%. Use ordinary interest. What is her effective rate to nearest hundredth percent?

Correct Answerverified10,000 × .11 × 13/52...View AnswerShow Answer

Correct AnswerverifiedA. $385; B...View AnswerShow Answer

On May 12, Joy Co. accepted a $1,000, 60-day, 6% note from Abe Wills, granting a time extension on a past-due account. Joy discounted the note at the bank at 9% on May 28. Use ordinary interest. Calculate Joy's proceeds.

Correct Answerverified1,000 × .06 × 60/360 = $10; MV...View AnswerShow Answer

Correct Answer
verified

Correct Answer
verified
A. 6,000 × .11 × (10...
View Answer

Correct Answer
verified

Correct Answer
verified
10,000 × .11 × 13/52...
View Answer

Correct Answer
verified
A. $385; B...
View Answer

Correct Answer
verified
1,000 × .06 × 60/360 = $10; MV...
View Answer