Varsity Press, a publisher of college textbooks, received a $70,000 promissory note at 12% ordinary interest for 60 days from one of its customers, Reader’s Choice Bookstores. After 20 days, Varsity Press discounted the note at the Grove Isle Bank at a discount rate of 14.5%. The note was made on March 21. What was the maturity date of the note?

Question

Varsity Press, a publisher of college textbooks, received a $70,000 promissory note at 12% ordinary interest for 60 days from one of its customers, Reader’s Choice Bookstores. After 20 days, Varsity Press discounted the note at the Grove Isle Bank at a discount rate of 14.5%. The note was made on March 21. What was the maturity date of the note?

Answer 1

To determine the maturity date of the note, we need to calculate the total number of days from the date the note was made to the maturity date.

The note was made on March 21, and it had a term of 60 days. To find the maturity date, we need to add 60 days to March 21.

First, let's calculate the number of days from March 21 to April 20 (20 days after March 21), which is the day Varsity Press discounted the note at the Grove Isle Bank.

We can subtract the start date (March 21) from the end date (April 20):
April 20 - March 21 = 30 days.

Next, let's calculate the remaining number of days from April 20 to the maturity date.

Since the total term of the note is 60 days, and we have already accounted for 30 days, we can calculate the remaining days by subtracting 30 from 60:
60 - 30 = 30 days.

To determine the maturity date, we need to add the remaining days to the date the note was discounted (April 20).

April 20 + 30 days = May 20.

Therefore, the maturity date of the note is May 20.