Question 1

The effective rate of a $25,000 non-interest-bearing simple discount 10%, 90-day note is:

Accepted Answer

A)  10.62% 
B)  10% 
C)  10.8% 
D)  10.26% 
E)  None of these 
A)  10.62% 
B)  10% 
C)  10.8% 
D)  10.26% 
E)  None of these

Question 2

A $25,000, 15%, 80-day note dated November 5 is discounted at National Bank on January 5. The discount period is:

Accepted Answer

A)  80 days 
B)  19 days 
C)  61 days 
D)  91 days 
E)  None of these 
A)  80 days 
B)  19 days 
C)  61 days 
D)  91 days 
E)  None of these

Question 3

To calculate Time, Interest is divided by Principal times:

Accepted Answer

A)  Amount of the note 
B)  Discount 
C)  Face value 
D)  Rate 
E)  None of these 
A)  Amount of the note 
B)  Discount 
C)  Face value 
D)  Rate 
E)  None of these

Question 4

Lois Longin buys a $10,000 13-week Treasury bill at 11%. Use ordinary interest. What is her effective rate to nearest hundredth percent?

Accepted Answer

The answer of Lois Longin buys a $10,000 13-week Treasury...

Question 5

Use ordinary interest:

Accepted Answer

A. $61,400

Question 6

The maker of a promissory note:

Accepted Answer

A)  Issues the note 
B)  Never borrows the money 
C)  Extends the credit 
D)  Issues the note and extends credit 
E)  None of these 
A)  Issues the note 
B)  Never borrows the money 
C)  Extends the credit 
D)  Issues the note and extends credit 
E)  None of these

Question 7

A promissory note is always an oral promise.

Accepted Answer

A) True 
 B)False

Question 8

Proceeds from discounting an interest-bearing note is the principal minus the bank discount.

Accepted Answer

A) True 
 B)False

Question 9

On October 15, Daniel Miller accepted a $5,000, 60-day, 8% note from Bill Boyer granting a time extension on a past-due amount. Daniel discounted the note at Volve Bank at 9% on Oct. 26. Use ordinary interest. Calculate Daniel's proceeds.

Accepted Answer

The answer of On October 15, Daniel Miller accepted a...

Question 10

Proceeds of a simple discount note equals amount borrowed minus bank discount.

Accepted Answer

A) True 
 B)False

Question 11

On April 12, Dr. Rowan accepted a $10,000, 60-day, 11% note from Bill Moss granting a time extension on a past-due account. Dr. Rowan discounted the note at the bank at 12% on May 13. The bank discount is:

Accepted Answer

A)  $98.44 
B)  $111.94 
C)  $94.48 
D)  $111.49 
E)  None of these 
A)  $98.44 
B)  $111.94 
C)  $94.48 
D)  $111.49 
E)  None of these

Question 12

Moris Bank discounts a 100-day note for $6,000 at 11%. Find 
(A) bank discount and 
(B) proceeds. Use ordinary interest.

Accepted Answer

A. $183.33

Question 13

Molly Lenny bought a $10,000 13-week Treasury bill at 13%. What is her effective rate? Use ordinary interest. Round to nearest hundredth percent.

Accepted Answer

The answer of Molly Lenny bought a $10,000 13-week Treasury...

Question 14

Use ordinary interest:

Accepted Answer

A. $18,480

Question 15

Jill Jones borrowed $18,000 for 180 days from Sovereign Bank. The bank discounts the note at 8%. The effective interest rate to the nearest hundredth percent is:

Accepted Answer

A)  8.33% 
B)  8.32% 
C)  8.23% 
D)  8.31% 
E)  None of these 
A)  8.33% 
B)  8.32% 
C)  8.23% 
D)  8.31% 
E)  None of these

Question 16

If one discounts a non-interest-bearing note, all the following will be used except:

Accepted Answer

A)  Principal + interest 
B)  Discount rate 
C)  Discount period 
D)  Face value of the note 
E)  None of these 
A)  Principal + interest 
B)  Discount rate 
C)  Discount period 
D)  Face value of the note 
E)  None of these

Question 17

Banks can never deduct interest in advance on a loan.

Accepted Answer

A) True 
 B)False

Question 18

On March 12, Bill Jones accepted a $12,000 note in granting a time extension of a bill for goods purchased by Ron Prentice. Terms of the note were 13% for 90 days. On April 24, Bill could no longer wait for the money and discounted the note at Able Bank at a discount rate of 14%. The proceeds to Bill is:

Accepted Answer

A)  $12,047.90 
B)  $12,163.54 
C)  $12,390.00 
D)  $12,048.90 
E)  None of these 
A)  $12,047.90 
B)  $12,163.54 
C)  $12,390.00 
D)  $12,048.90 
E)  None of these

Question 19

An 8% 13-week Treasury bill would have an effective interest rate of (to the nearest hundredth percent)? Assume it is a $10,000 Treasury bill.

Accepted Answer

A)  8.20% 
B)  8.16% 
C)  8.17% 
D)  9.00% 
E)  None of these 
A)  8.20% 
B)  8.16% 
C)  8.17% 
D)  9.00% 
E)  None of these

Question 20

A $7,000, 4%, 120-day note dated March 20 is discounted on July 15. Assuming a 3% discount rate, the bank discount is:

Accepted Answer

A)  $1.74 
B)  $1.77 
C)  $7.11 
D)  $17.68 
E)  None of these 
A)  $1.74 
B)  $1.77 
C)  $7.11 
D)  $17.68 
E)  None of these

The effective rate of a $25,000 non-interest-bearing simple discount 10%, 90-day note is:

A $25,000, 15%, 80-day note dated November 5 is discounted at National Bank on January 5. The discount period is:

To calculate Time, Interest is divided by Principal times:

Lois Longin buys a $10,000 13-week Treasury bill at 11%. Use ordinary interest. What is her effective rate to nearest hundredth percent?

Use ordinary interest:

The maker of a promissory note:

A promissory note is always an oral promise.

Proceeds from discounting an interest-bearing note is the principal minus the bank discount.

On October 15, Daniel Miller accepted a $5,000, 60-day, 8% note from Bill Boyer granting a time extension on a past-due amount. Daniel discounted the note at Volve Bank at 9% on Oct. 26. Use ordinary interest. Calculate Daniel's proceeds.

Proceeds of a simple discount note equals amount borrowed minus bank discount.

On April 12, Dr. Rowan accepted a $10,000, 60-day, 11% note from Bill Moss granting a time extension on a past-due account. Dr. Rowan discounted the note at the bank at 12% on May 13. The bank discount is:

Moris Bank discounts a 100-day note for $6,000 at 11%. Find (A) bank discount and (B) proceeds. Use ordinary interest.

Molly Lenny bought a $10,000 13-week Treasury bill at 13%. What is her effective rate? Use ordinary interest. Round to nearest hundredth percent.

Use ordinary interest:

Jill Jones borrowed $18,000 for 180 days from Sovereign Bank. The bank discounts the note at 8%. The effective interest rate to the nearest hundredth percent is:

If one discounts a non-interest-bearing note, all the following will be used except:

Banks can never deduct interest in advance on a loan.

An 8% 13-week Treasury bill would have an effective interest rate of (to the nearest hundredth percent)? Assume it is a $10,000 Treasury bill.

A $7,000, 4%, 120-day note dated March 20 is discounted on July 15. Assuming a 3% discount rate, the bank discount is:

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How to Read, Analyze, and Interpret Financial Reports

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Exam 17: Promissory Notes, Simple Discount Notes, and the Discount Process

The effective rate of a $25,000 non-interest-bearing simple discount 10%, 90-day note is:

A $25,000, 15%, 80-day note dated November 5 is discounted at National Bank on January 5. The discount period is:

To calculate Time, Interest is divided by Principal times:

Lois Longin buys a $10,000 13-week Treasury bill at 11%. Use ordinary interest. What is her effective rate to nearest hundredth percent?

Use ordinary interest:

The maker of a promissory note:

A promissory note is always an oral promise.

Proceeds from discounting an interest-bearing note is the principal minus the bank discount.

On October 15, Daniel Miller accepted a $5,000, 60-day, 8% note from Bill Boyer granting a time extension on a past-due amount. Daniel discounted the note at Volve Bank at 9% on Oct. 26. Use ordinary interest. Calculate Daniel's proceeds.

Proceeds of a simple discount note equals amount borrowed minus bank discount.

On April 12, Dr. Rowan accepted a $10,000, 60-day, 11% note from Bill Moss granting a time extension on a past-due account. Dr. Rowan discounted the note at the bank at 12% on May 13. The bank discount is:

Moris Bank discounts a 100-day note for $6,000 at 11%. Find (A) bank discount and (B) proceeds. Use ordinary interest.

Molly Lenny bought a $10,000 13-week Treasury bill at 13%. What is her effective rate? Use ordinary interest. Round to nearest hundredth percent.

Use ordinary interest:

Jill Jones borrowed $18,000 for 180 days from Sovereign Bank. The bank discounts the note at 8%. The effective interest rate to the nearest hundredth percent is:

If one discounts a non-interest-bearing note, all the following will be used except:

Banks can never deduct interest in advance on a loan.

An 8% 13-week Treasury bill would have an effective interest rate of (to the nearest hundredth percent)? Assume it is a $10,000 Treasury bill.

A $7,000, 4%, 120-day note dated March 20 is discounted on July 15. Assuming a 3% discount rate, the bank discount is:

Problem Solving With Math

Fractions

Decimals

Solving for the Unknown

Business Statistics

Banking and Budgeting

Payroll and Income Tax

Sales, Excise, and Property Taxes

Risk Management

Installment Buying and Revolving Charge Credit Cards

Discounts: Trade and Cash

Markups and Markdowns: Perishables and Breakeven Analysis

How to Read, Analyze, and Interpret Financial Reports

Depreciation

Inventory and Overhead

Simple Interest

The Cost of Home Ownership

Compound Interest and Present Value

Annuities and Sinking Funds

Stocks, Bonds, and Mutual Funds

Filters