I completed a problem where there was a $7855.00 note at the bank that charges a 14.3 % discount rate. The loan is for 190 days. I found the proceeds to be $7268.31 and the effective rate charged by the bank to be 15.29 %. How do I determine how much money must be paid back to the bank. Is it the original amount of the note or is there a further formula I should use? Thank you.

To determine how much money must be paid back to the bank, you need to consider the effective rate charged by the bank. In this case, the effective rate is 15.29%. The effective rate takes into account any additional fees or charges associated with the loan, and it reflects the true cost of borrowing.

To calculate the amount to be paid back to the bank, you can use the formula:

Amount to be paid back = Proceeds / (1 + Effective rate)

In this formula, "Proceeds" refers to the amount you received from the bank, which is $7268.31 in this case. "Effective rate" is the rate charged by the bank, expressed as a decimal (15.29% = 0.1529).

Plugging in the values into the formula:

Amount to be paid back = $7268.31 / (1 + 0.1529)

Amount to be paid back = $7268.31 / 1.1529

Amount to be paid back ≈ $6311.18

Therefore, you would need to pay back approximately $6311.18 to the bank.