1) JAB Consulting received a promissory note of $11,500 at 7% simple interest for 15 months from one of its customers. After 6 months, Grove Isle Bank discounted the note at a discount rate of 8% Calculate the proceeds (in $) that JAB Consulting will receive from the discounted note. Round your answer to the nearest cent.

2) Carlos takes out a loan for $10,400, at 8% ordinary interest. If the amount of interest is $249.60, what is the time period (in days) of the loan? Round any fraction to the next higher day. 

Answer:

1)Given Principal=$11500

Simple Interest rate=7% for 15 months

Discount Rate =8%

The 1^st step is to  calculate the maturity value of the original note

Maturity Value =Principal(1+ Rate* Time)

Maturity Value = 11500 {1+0.07*(15/12)} = $12506.25

The discount period is (15-6) = 9 months  

Now calculating the amount of bank discount

Bank discount = (Maturity Value*Discount Rate*Time)

= 12506.25*0.08*(9/12) = $750.375

 Now Proceeds of the discounted note = (Maturity Value - Bank discount) = 12506.25-750.375

Proceeds = $11755.88

2) Given that principle amount P =10400

Ordinary interest i =8%

If we let the time period to ne n days

Interest is $249.60

Interest =Principal amount *Interest *time period/365

249.60=(104000.08*n)/365

n=(249.60*365)/(10400*0.08)

=109.5

=110 days (Approx.)