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10 May, 23:11

Mel Sturbridge needs $24,700 to remodel his home. Find the face value of a simple discount note that will provide the $24,700 in proceeds if he plans to repay the note in 180 days and the bank charges an 8% discount rate. Round to the nearest cent.

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  1. 11 May, 00:58
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    Discount rate, d = 8% = 0.08 No. of days = 180 i. e. n = 180/365, PV = 24,700, PV = C (1 - nd), 24700 = C (1 - (180/365) * 0.08) i. e. 24700 = 0.96055C i. e. C = 25714.43
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