MATH SOLVE

2 months ago

Q:
# 1. The proceeds of a $7,500.00, 10 percent simple discounted note for 85 days is$7,325.34.$7,677.08.$7,674.66.$7,322.92

Accepted Solution

A:

Answer: it depends (see below)Step-by-step explanation:Exact InterestExact interest is calculated on the basis of a 365-day year, so the exact interest on the loan would be ... I = Prt = $7500·0.10·(85/365) = $174.66Then the proceeds would be ... $7500 -174.66 = $7,325.34 . . . . . matches first option__Ordinary InterestExact interest is calculated on the basis of a 360-day year, so the ordinary interest on the loan would be ... I = Prt = $7500·0.10·(85/360) = $177.08Then the proceeds would be ... $7500 - 177.08 = $7,322.92 . . . . . matches last option_____I suggest you check your reference materials (text or course examples) to see what year length is expected to be used in this calculation. Some on-line references show it one way; others show it the other way.