Question

Ron Prentice bought goods from shelly katz. on may 8, shelly gave ron a time extension on his bill by accepting a 3000.00, 8%, 180-day note. on august 16 shelly discounted the note at roseville bank at 9%. What proceeds does shelly katz receive? We are using 360 for the day

Answer 1

days from may 8 to august 16 is 100 days
3,000 x .08 x (180/360) = $ 120
3,000+120 = 3,120 Maturity Value
180 days minus 100 days = 80 days discount period
3,120 x .09 x (80/360)= $62.40
3120-62.40 = $3,057.60 Proceeds