Carl Sonntag wanted to compare what proceeds he would receive with a simple interest note versus a simple discount note. Both had the same terms: $19,500 at 8% for 2 years. Use ordinary interest as needed.
a. Calculate the simple interest note proceeds.
Can someone help me?
Simple interest note proceeds $
b. Calculate the simple discount note proceeds.
Simple discount note proceeds $
a. To calculate the simple interest note proceeds, we can use the formula:
Interest = Principal x Rate x Time
Where:
Principal = $19,500
Rate = 8% (or 0.08 as a decimal)
Time = 2 years
Interest = $19,500 x 0.08 x 2
Interest = $3,120
Now, to calculate the simple interest note proceeds, we need to add the interest earned to the principal amount:
Simple Interest Note Proceeds = Principal + Interest
Simple Interest Note Proceeds = $19,500 + $3,120
Simple Interest Note Proceeds = $22,620
Therefore, the simple interest note proceeds would be $22,620.
b. To calculate the simple discount note proceeds, we can use the following formula:
Discount = Principal x Rate x Time
Where:
Principal = $19,500
Rate = 8% (or 0.08 as a decimal)
Time = 2 years
Discount = $19,500 x 0.08 x 2
Discount = $3,120
Now, to calculate the simple discount note proceeds, we need to subtract the discount amount from the principal amount:
Simple Discount Note Proceeds = Principal - Discount
Simple Discount Note Proceeds = $19,500 - $3,120
Simple Discount Note Proceeds = $16,380
Therefore, the simple discount note proceeds would be $16,380.
Sure, I can help you calculate the proceeds for both the simple interest note and the simple discount note.
First, let's calculate the simple interest note proceeds:
The formula for calculating simple interest is:
Interest = Principal x Rate x Time
Given:
Principal (P) = $19,500
Rate (R) = 8% (expressed as a decimal, 0.08)
Time (T) = 2 years
Using the formula, we can calculate the interest earned:
Interest = $19,500 x 0.08 x 2
= $3,120
To find the simple interest note proceeds, we need to add the interest earned to the principal:
Simple Interest Note Proceeds = Principal + Interest
= $19,500 + $3,120
= $22,620
So, the simple interest note proceeds are $22,620.
Now, let's calculate the simple discount note proceeds:
The formula for calculating simple discount is:
Discount = Principal x Rate x Time
Given the same principal and rate as before, we can use the formula to find the discount:
Discount = $19,500 x 0.08 x 2
= $3,120
To find the simple discount note proceeds, we need to subtract the discount from the principal:
Simple Discount Note Proceeds = Principal - Discount
= $19,500 - $3,120
= $16,380
So, the simple discount note proceeds are $16,380.
To summarize:
a. The simple interest note proceeds are $22,620.
b. The simple discount note proceeds are $16,380.
Find the simple interest owed for the use of the money. Assume 360 days in a year.
P=$5000.00, R=8.5%, T=9 months