Answer to Question #165729 in Financial Math for King

Question

2. Which of the methods above is referred as the Bankers’ Rule?

3. Manoling Manufacturing received a P400,000 promissory note at 12% simple interest for 95

days from one of its customers. After 70 days Manoling discounted the note at the Far East Bank at a discount rate of 15%. The note was made on September 12?

a. What is the Maturity Date of the Note?

b. What is the Maturity Value of the Note? L

c. What is the Discount Date of the Note?

d. What proceeds will Manoling receive after discounting the note?

4. Wowie bought some items on account from Codilla. He then issued a 10% promissory note for 90 days amounting to P10,000. On the 30th day, Wowie won a cash raffle so he decided to partially settle his liability. He paid P2,500 then. Answer the following assuming an ordinary interest is applied.

a. How much of the partial payment is applicable to interest?

b. How much of the partial payment is applicable to principal? (5 points)

c. What is the adjusted principal?

d. How much did he pay in total upon the expiration of the term?

Answer 1

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