Question

Varsity Press, a publisher of college textbooks, received a $70,000 promissory note at 12% ordinary interest for 60 days from one of its customers, Reader’s Choice Bookstores. After 20 days, Varsity Press discounted the note at the Grove Isle Bank at a discount rate of 14.5%. The note was made on March 21. What was the maturity date of the note?

Answer 1

March 31-21 (Date of note)=10 days remaining.

Take the 60 days-10 (days remaining in march)=50-30 (days in April)=20 days

So, the maturity date of the note is May 20th.

Answer 2

Using the scenario from the previous question, calculate the maturity value of the note.