Question

A building contractor gives a ​$15,000 promissory note to a plumber who has loaned him ​$15,000. The note is due in 9 months with interest at 8​%. Three months after the note is​ signed, the plumber sells it to a bank. If the bank gets a 9​% return on its​ investment, how much will the plumber​ receive? Will it be enough to pay a bill for ​$ 15,285​? How much will the plumber​ receive?

Answer 1

Remaining months = 6

Hence, amount received by plumber on sale of note = Amount to be received in future/(1+Interest rate)

= 15000/(1+8%*6/12)

= $14,423.08

No, it won't be enough to pay $15,285

Answer 2

Is the correct answer!! $15,215.31