The Amount the Bank Charges When It Discounts a Note

Multiple Choice

The amount the bank charges when it discounts a note is calculated as:

A) bank discount = note principal × bank discount rate × (discount period /360 days) .
B) bank discount = maturity value × bank discount rate × (original note period /360 days) .
C) bank discount = maturity value × bank discount rate + original interest rate × (discount period /360 days) .
D) bank discount = maturity value × bank discount rate × (discount period /360 days) .