Question

On May 15, Maynard Co. borrowed cash from Texas Bank by issuing a 90-day note with a face amount of $73,200. Assume a 360-day year.

a. Determine the proceeds of the note, assuming the note carries an interest rate of 9%.
$

b. Determine the proceeds of the note, assuming the note is discounted at 9%.
$

Answer 1

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Please find below the answer
Statementshowing Computations
Paticulars	Amount
a) Since the note is not discounted proceeds of the note are	73,200.00
b)
Discount on note = 73,200*90/360*9%	1,647.00
Proceeds from issue of note = 73,200 - 1647	71,553.00