document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=1193660>Question 1193660</A>: <I><SPAN STYLE=\"word-break: break-all;\"> Please with the homework.\r<BR>\n" );
document.write( "\n" );
document.write( "A promissory note dated 1 April 2021 for 1500, borrowed at a simple interest 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 it's present value on the date of sale? </SPAN>\n" );
document.write( "</I><HR><TABLE width=100%><TR><TD><B><A HREF=http://www.algebra.com/>Algebra.Com's</A> Answer #848558 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=848558\">put this solution on YOUR website!</A><BR><SPAN STYLE=\"word-break: break-all;\"> **1.1. Calculate the Maturity Value of the Note**\r<BR>\n" );
document.write( "\n" );
document.write( "* **Calculate the discount period (in years):** <BR>\n" );
document.write( "    * From April 1, 2021, to October 1, 2021, there are 6 months (180 days).<BR>\n" );
document.write( "    * 180 days / 360 days (assuming a 360-day year) = 0.5 years\r<BR>\n" );
document.write( "\n" );
document.write( "* **Calculate the discount amount:**<BR>\n" );
document.write( "    * Discount Amount = Face Value * Discount Rate * Time <BR>\n" );
document.write( "                        = $1500 * 0.16 * 0.5 <BR>\n" );
document.write( "                        = $120\r<BR>\n" );
document.write( "\n" );
document.write( "* **Calculate the Maturity Value:**<BR>\n" );
document.write( "    * Maturity Value = Face Value - Discount Amount<BR>\n" );
document.write( "                     = $1500 - $120<BR>\n" );
document.write( "                     = $1380\r<BR>\n" );
document.write( "\n" );
document.write( "**1.2. Calculate the Present Value on the Date of Sale**\r<BR>\n" );
document.write( "\n" );
document.write( "* **Calculate the time remaining to maturity:**<BR>\n" );
document.write( "    * From July 1, 2021, to October 1, 2021, there are 3 months (90 days).<BR>\n" );
document.write( "    * 90 days / 360 days = 0.25 years\r<BR>\n" );
document.write( "\n" );
document.write( "* **Calculate the discount period for the remaining time:**<BR>\n" );
document.write( "    * Discount Amount (from July 1 to maturity) = Maturity Value * Discount Rate * Time<BR>\n" );
document.write( "                                            = $1380 * 0.16 * 0.25<BR>\n" );
document.write( "                                            = $55.20\r<BR>\n" );
document.write( "\n" );
document.write( "* **Calculate the Present Value on the Date of Sale:**<BR>\n" );
document.write( "    * Present Value = Maturity Value - Discount Amount (from July 1 to maturity)<BR>\n" );
document.write( "                     = $1380 - $55.20<BR>\n" );
document.write( "                     = $1324.80\r<BR>\n" );
document.write( "\n" );
document.write( "**Therefore:**\r<BR>\n" );
document.write( "\n" );
document.write( "* **1.1. The maturity value of the note is $1380.**<BR>\n" );
document.write( "* **1.2. The present value on the date of sale (July 1, 2021) is $1324.80.**\r<BR>\n" );
document.write( "\n" );
document.write( "**Note:**\r<BR>\n" );
document.write( "\n" );
document.write( "* This calculation assumes a 360-day year for simplicity. <BR>\n" );
document.write( "* In some cases, a 365-day year might be used.<BR>\n" );
document.write( "* This calculation does not consider any potential compounding of interest.<BR>\n" );
document.write( " </SPAN>\n" );
document.write( "</TD></TR></TABLE>\n" );