Using ordinary interest, 360 days, calculate the missing information for the simple discount note. (Round dollars to the nearest cent.) Face Discount Date of Term Maturity Date Bank Discount Proceeds Value Rate (%) Note (days) (in $) (in $) $700 12.5 Sept. 6 107 December 23 $ 27 $ 774 Need Help? Read It

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Using ordinary interest, 360 days, calculate the missing information for the
simple discount note. (Round dollars to the nearest cent.)
Face
Discount
Date of
Term
Maturity
Bank Discount
Proceeds
Value
Rate (%)
Note
(days)
Date
(in $)
(in $)
$700
12.5
Sept. 6
107
December
23
$ 27
$ 774
Need Help?
Read It
Transcribed Image Text:Using ordinary interest, 360 days, calculate the missing information for the simple discount note. (Round dollars to the nearest cent.) Face Discount Date of Term Maturity Bank Discount Proceeds Value Rate (%) Note (days) Date (in $) (in $) $700 12.5 Sept. 6 107 December 23 $ 27 $ 774 Need Help? Read It
Expert Solution
Step 1

Formula:

Bank discount = Face value x Discount rate x Time period

Multiplying face value , discount rate, time period derives the bank discount rate.

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