Find the proceeds of a promissory note with a maturity value of $2900 due on December...

Question

Question

Find the proceeds of a promissory note with a maturity value of $2900 due on December 31, 2021, discounted at 5.6% compounded

Answer 1

Answer #1

Solution:

Nos semiannual period = 2.5*2 = 5 periods

Semi annual interest rate = 5.6% / 2 = 2.80%

Proceeds = $2,900 * PV Factor at 2.80% for 5th period

= $2,900 * 0.871033 = $2,526

Answer 2

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