document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=1193719>Question 1193719</A>: <I><SPAN STYLE=\"word-break: break-all;\"> Please help with a homework.\r<BR>\n" );
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document.write( "A promissory note dated 1 April 2021 for 1500, borrowed at a simple discount rate of 16%p.a. due on the 1 October 2021 is sold on the 1 July 2021.<BR>\n" );
document.write( "1.1. what is the maturity value of the note?<BR>\n" );
document.write( "1.2. what is the present value on the date of the sale? </SPAN>\n" );
document.write( "</I><HR><TABLE width=100%><TR><TD><B><A HREF=http://www.algebra.com/>Algebra.Com's</A> Answer #848557 by </B><A HREF=/tutors/aboutme.mpl?userid=parmen><B>parmen(42)</B></A><img src=\"/images/stars/stars-07.gif\" alt=\"\" >&nbsp;<A HREF=/tutors/aboutme.mpl?userid=parmen><IMG SRC=http://www.algebra.com/images/aboutme-small.gif BORDER=0 alt=\"About Me\" VALIGN=MIDDLE></A>&nbsp;<IMG SRC=http://www.algebra.com/images/nopicture.jpg><BR>You can <A HREF=\"/cgi-bin/embed-solution.mpl?show=1&solution=848557\">put this solution on YOUR website!</A><BR><SPAN STYLE=\"word-break: break-all;\"> ### 1.1 Maturity Value of the Note\r<BR>\n" );
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document.write( "The **maturity value** of the note is the amount payable at the end of the term of the loan. For a promissory note, this is simply the face value, as the simple discount applies at the start or upon sale, not to the maturity value itself.\r<BR>\n" );
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document.write( "\text{Maturity Value} = 1500 \, (\text{face value of the note})<BR>\n" );
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document.write( "### 1.2 Present Value on the Date of the Sale\r<BR>\n" );
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document.write( "The **present value** of a note under a simple discount is calculated using the formula:\r<BR>\n" );
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document.write( "PV = M \times (1 - d \times t)<BR>\n" );
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document.write( "Where:<BR>\n" );
document.write( "- \( M \) = Maturity value = \( 1500 \)<BR>\n" );
document.write( "- \( d \) = Discount rate = \( 16\% = 0.16 \)<BR>\n" );
document.write( "- \( t \) = Time remaining to maturity in years (from 1 July 2021 to 1 October 2021) = \( \frac{3}{12} = 0.25 \)\r<BR>\n" );
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document.write( "Substitute the values:\r<BR>\n" );
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document.write( "PV = 1500 \times (1 - 0.16 \times 0.25)<BR>\n" );
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document.write( "PV = 1500 \times (1 - 0.04)<BR>\n" );
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document.write( "PV = 1500 \times 0.96<BR>\n" );
document.write( "\]\r<BR>\n" );
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document.write( "\[<BR>\n" );
document.write( "PV = 1440<BR>\n" );
document.write( "\]\r<BR>\n" );
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document.write( "### Summary<BR>\n" );
document.write( "1. **Maturity Value**: \( 1500 \)<BR>\n" );
document.write( "2. **Present Value on 1 July 2021**: \( 1440 \) </SPAN>\n" );
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