Question 10 Suppose the person holding the promissory note from the above problem sells the note after 80 days (40 days of discounting). Find the discount amount if the note is discounted at 10%. Type your answer Question 11 Find the proceeds from the above problem. Type your answer Question 12 A bank makes a new loan of $15,000 face value at a discount rate of 8% for 6 months. Find the proceeds.

Question 10 Suppose the person holding the promissory note from the above problem sells the note after 80 days (40 days of discounting). Find the discount amount if the note is discounted at 10%. Type your answer Question 11 Find the proceeds from the above problem. Type your answer Question 12 A bank makes a new loan of $15,000 face value at a discount rate of 8% for 6 months. Find the proceeds.

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter22: Providing And Obtaining Credit

Section: Chapter Questions

Problem 4P: Gifts Galore Inc. borrowed 1.5 million from National City Bank. The loan was made at a simple annual...

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Gifts Galore Inc. borrowed 1.5 million from National City Bank. The loan was made at a simple annual interest rate of 9% a year for 3 months. A 20% compensating balance requirement raised the effective interest rate. a. The nominal annual rate on the loan was 11.25%. What is the true effective rate? b. What would be the effective cost of the loan if the note required discount interest? c. What would be the nominal annual interest rate on the loan if the bank did not require a compensating balance but required repayment in three equal monthly installments?
PROBLEM 4: A note purchased for P100 000 .00 is due in 12 months at 10% simple interest . After 5 months , the owner of the note sold it a client who charged a discount rate of 12 % . Determine the price paid for the note.
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