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Business Mathematics Brief 12th Edition by Stanley Salzman ,Gary Clendenen, Charles Miller
Edition 12ISBN: 978-0132605540Business Mathematics Brief 12th Edition by Stanley Salzman ,Gary Clendenen, Charles Miller
Edition 12ISBN: 978-0132605540 Exercise 139
Explain the procedure used to determine the bank discount and the proceeds for a note. (See Objective.)
OBJECTIVE Find the proceeds when discounting simple interest notes. The amount of cash actually received by the boat manufacturer on the sale of a promissory note is the proceeds. The bank then collects the maturity value from the maker of the note, the retailer, when it is due. These notes are usually sold with recourse. This means that the bank receives reimbursement from the manufacturer if the retailer does not pay the bank when the note matures Thus the bank is protected against loss. Many banks refuse to buy these types of notes unless they have recourse.
OBJECTIVE Find the proceeds when discounting simple interest notes. The amount of cash actually received by the boat manufacturer on the sale of a promissory note is the proceeds. The bank then collects the maturity value from the maker of the note, the retailer, when it is due. These notes are usually sold with recourse. This means that the bank receives reimbursement from the manufacturer if the retailer does not pay the bank when the note matures Thus the bank is protected against loss. Many banks refuse to buy these types of notes unless they have recourse.
Explanation
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Use the formula below to determine the b...
Business Mathematics Brief 12th Edition by Stanley Salzman ,Gary Clendenen, Charles Miller
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