SOLUTION: An investment company owns a 10-year, 6% simple interest note that has a face value of $50,000. A bank agrees to purchase the note 3 years before it is due by discounting it a 9%.
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Question 174221: An investment company owns a 10-year, 6% simple interest note that has a face value of $50,000. A bank agrees to purchase the note 3 years before it is due by discounting it a 9%. Find the maturity value of the note, the discount, and the proceeds. Answer by Mathtut(3670) (Show Source):
You can put this solution on YOUR website! I=50000(.06)(10)=30000
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Maturity Value=80000
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discount equals 80000(.09)(3)=21600
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proceeds are 80000-21600=58400
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