Deck 15: Promissory Notes and Discounting

Question 1

Compute the maturity value on each of the following notes. Fill in the missing entries for time or maturity date. (Use a 360-day year.)
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Answer 1

Question 2

Compute the number of days upon which interest would be computed in the following situations. Check for leap years.
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Answer 2

Question 3

Determine the maturity date for each of the following notes. Consider leap years where necessary.
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Answer 3

Question 4

Compute the number of days upon which interest would be computed in the following situations. Check for leap years.
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Question 5

Determine the maturity date for each of the following notes. Consider leap years where necessary.
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Question 6

Compute the maturity value on each of the following notes. Fill in the missing entries for time or maturity date. (Use a 365-day year.)
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Question 7

Compute the maturity value on each of the following notes. Fill in the missing entries for time or maturity date. (Use a 365-day year.)
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Question 8

Compute the maturity value on each of the following notes. Fill in the missing entries for time or maturity date. (Use a 360-day year.)

Question 9

Determine the maturity date for each of the following notes. Consider leap years where necessary.
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Question 10

Compute the number of days upon which interest would be computed in the following situations. Check for leap years.
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Question 11

Lillian Barnes made extra money by lending small amounts of money to small businesses. One such loan dated September 9, was for $8,680, for 75 days at 8.6% interest. On October 25, Lillian decided to sell the loan to a lending institution which discounted it at 12.7%. Use a 365-day year to find the missing information on the loan.
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Question 12

Deidra Holmes held a $2,800, 90-day note dated April 28, bearing interest at 11%. On June 12, she took the note to Great Northern National Bank which discounted it at 16.5%. Use a 365-day year to find the missing information on the loan.

Question 13

Compute the maturity value on each of the following notes. Fill in the missing entries for time or maturity date. (Use a 360-day year.)
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Question 14

Carrie Umholtz held a $3,200, 105-day note dated July 7, bearing interest at 9.6%. On August 11, Carrie took the note to a finance company which discounted it at 11.3%. Use a 365-day year to find the missing information on the loan.
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Question 15

Compute the maturity value on each of the following notes. Fill in the missing entries for time or maturity date. (Use a 360-day year.)
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Question 16

Determine the maturity date for each of the following notes. Consider leap years where necessary.
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Question 17

Reed Lyons held a $1,790, 60-day note dated December 22, bearing interest at 9%. On January 11, he took the note to Surety Financing Company which discounted it at 13%. Use a 365-day year to find the missing information on the loan.
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Question 18

Compute the maturity value on each of the following notes. Fill in the missing entries for time or maturity date. (Use a 365-day year.)
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Question 19

Compute the number of days upon which interest would be computed in the following situations. Check for leap years.
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Question 20

Compute the maturity value on each of the following notes. Fill in the missing entries for time or maturity date. (Use a 365-day year.)
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Question 21

On some personal loans, Buckhorn County Bank & Trust uses the discount method of calculating finance charges. For the two loans below, calculate the discount amount that Buckhorn Bank is charging and the proceeds that go to the borrower. Then calculate the actual interest rate which is based on the proceeds rather than the face value. Use a 360-day year and compute actual rates to the nearest 1/100 of a percent.
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Question 22

Silver Falls Finances, Inc. made the following two loans using a discount rate to compute the charge, and then loaned the proceeds to their clients. Compute the amount of discount, the proceeds, and the actual interest rate based upon the proceeds rather than the face value. Use a 360-day year and compute actual rates to the nearest 1/100 of a percent.
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Question 23

Southeast Home Loan Bank uses the discount method of calculating finance charges on some loans. For the two loans below, calculate the discount amount that goes to Southeast and the proceeds that go to the borrower. Then, calculate the actual interest rate which is based on the proceeds rather than the face value. Use a 365-day year and compute actual rates to the nearest 1/100 of a percent.
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Question 24

SCB Capital Bank uses the discount method of calculating finance charges on some loans. For the two loans below, calculate the discount amount that goes to Riverside and the proceeds that go to the borrower. Then, calculate the actual interest rate which is based on the proceeds rather than the face value. Use a 365-day year and compute actual rates to the nearest 1/100 of a percent.
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Question 25

Rural Global Co. makes many loans to individuals by discounting the face value of the loan. The borrower gets the proceeds. For the two loans below, determine the amount of the discount, the proceeds, and the actual interest rate which is based on the proceeds rather than the face value. Use a 365-day year and compute actual rates to the nearest 1/100 of a percent.
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Question 26

On October 1, Spencer Worthington loaned $2,000 to an old friend from the army. The note securing the loan was non-interest-bearing and was for only 30 days. On October 10, Spencer sold the note to a local finance company which discounted it at 12%. Use a 365-day year to find the missing information on the loan.
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Question 27

Thrifty Home Loan Corp. uses the discount method of calculating finance charges. For the two loans below, calculate the discount amount that Thrifty charges and the proceeds that go to the borrower. Then, calculate the actual interest rate which is based on the proceeds rather than the face value. Use a 360-day year and compute actual rates to the nearest 1/100 of a percent.​

Question 28

Gupta & Grant Computer Supplies usually tries to take advantage of cash discounts even if it must borrow the money for a few days in order to pay the invoice in time. Compute the savings on Gupta & Grant's purchases and terms from two different suppliers. Use a 365-day year. Assume that the number of interest days is the time between the due date and the last date to take advantage of the cash discount.​

Question 29

Sincere Personal Loan Corp. uses the discount method of calculating finance charges on many different loans. For the two loans below, calculate the discount amount that goes to Sincere and the proceeds that go to the borrower. Then, calculate the actual interest rate which is based on the proceeds rather than the face value. Use a 365-day year and compute actual rates to the nearest 1/100 of a percent.
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Question 30

White River Bank made the following two loans using a discount rate to compute the charge and then loaned the proceeds to their clients. Compute the amount of discount, the proceeds, and the actual interest rate based upon the proceeds rather than the face value. Use a 360-day year and compute actual rates to the nearest 1/100 of a percent.
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Question 31

First Republic Bank makes many loans to individuals by discounting the face value of the loan. The borrower gets the proceeds. For the two loans below, determine the amount of the discount, the proceeds, and the actual interest rate which is based on the proceeds rather than the face value. Use a 365-day year and compute actual rates to the nearest 1/100 of a percent.
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Question 32

Annamarie Weymeyer held a $3,750, 120-day, non-interest-bearing note dated July 24. On August 16, she took the note to First Bank of the Plains which discounted the note at 10%. Use a 365-day year to find the missing information on the loan.
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Question 33

FLR Investment Group, Inc. made the following two loans using a discount rate to compute the charge and then loaned the proceeds to their clients. Compute the amount of discount, the proceeds, and the actual interest rate based upon the proceeds rather than the face value. Use a 360-day year and compute actual rates to the nearest 1/100 of a percent.
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Question 34

Bovio Electrical Contracting tries to take advantage of cash discounts even if it must borrow the money for a few days in order to pay the invoice in time. Compute the savings on Bovio's purchases and terms from two different suppliers. Use a 360-day year. Assume that the number of interest days is the time between the due date and the last date to take advantage of the cash discount.
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Question 35

Sandra Baker held a $3,500, 70-day note dated March 14, bearing interest at 10%. On April 14, she took the note to Loyal Capital Bank which discounted it at 15%. Use a 365-day year to find the missing information on the loan.
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Question 36

Wei Fang Food Importers often tries to take advantage of cash discounts even if it must borrow the money for a few days in order to pay the invoice in time. Compute the savings on Wei Fang's purchases and terms from two different suppliers. Use a 365-day year. Assume that the number of interest days is the time between the due date and the last date to take advantage of the cash discount.

Question 37

Moneywise Loans and Credit Corp. makes many consumer loans by discounting the face value of the loan. The borrower gets the proceeds. For the two loans below, determine the amount of the discount, the proceeds, and the actual interest rate which is based on the proceeds rather than the face value. Use a 365-day year and compute actual rates to the nearest 1/100 of a percent.
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Question 38

Juan Munoz held a $1,170, 45-day, non-interest-bearing note dated March 30. On April 30, he took the note to Southwest Equity Loans which discounted the note at 12%. Use a 365-day year to find the missing information on the loan.
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Question 39

Garcia Heating & Air Conditioning tries to take advantage of cash discounts even if it must borrow the money for a few days in order to pay the invoice in time. Compute the savings on Garcia's purchases and terms from two different suppliers. Use a 360-day year. Assume that the number of interest days is the time between the due date and the last date to take advantage of the cash discount.
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Question 40

Marcia Driscoll held a $2,650, 90-day, non-interest-bearing note dated September 15. On October 15, she took the note to a bank which discounted the note at 13%. Use a 365-day year to find the missing information on the loan.
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Question 41

David & Dora Footwear Supplies usually tries to take advantage of cash discounts even if it must borrow the money for a few days in order to pay the invoice in time. Compute the savings on David & Dora's purchases and terms from two different suppliers. Use a 365-day year. Assume that the number of interest days is the time between the due date and the last date to take advantage of the cash discount.
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