Tom wanted to compare what proceeds he would receive with a simple interest note versus a simple discount note. Both had the same terms: $18,235 at 10% for 2 years. Use ordinary interest as needed.

a. Calculate the simple interest note proceeds.

b. Calculate the simple discount note proceeds.

Question

Mathematics

Mcmillan

1 March, 17:22

Tom wanted to compare what proceeds he would receive with a simple interest note versus a simple discount note. Both had the same terms: $18,235 at 10% for 2 years. Use ordinary interest as needed.

a. Calculate the simple interest note proceeds.

b. Calculate the simple discount note proceeds.

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Answers (1)

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Rowland · Answer 1

A) Simple interest note proceeds are equal to the face value: $18,235.

b) Simple discount note proceeds are the face value less the inerest due,

... $18,235 (1 - 0.10*2) = $14,588.

Tom wanted to compare what proceeds he would receive with a simple interest note versus a simple discount note. Both had the same terms: $18,235 at 10% for 2 years. Use ordinary interest as needed.a. Calculate the simple interest note proceeds.b. Calculate the simple discount note proceeds.

Tom wanted to compare what proceeds he would receive with a simple interest note versus a simple discount note. Both had the same terms: $18,235 at 10% for 2 years. Use ordinary interest as needed.

a. Calculate the simple interest note proceeds.

b. Calculate the simple discount note proceeds.