1.FIND the bank discount and proceeds on the following loans
i) RM4000 FOR 3 MONTHS at 10 1/2 percent
ii) RM4215 FROM 10 june to 5 august of the same year at 10 percent
To find the bank discount and proceeds for each of the loans, we need to use the following formulas:
1) Bank Discount = Principal x Interest Rate x Time
2) Proceeds = Principal - Bank Discount
Now let's find the bank discount and proceeds for each loan:
i) Loan:
Principal (P) = RM4000
Interest Rate (R) = 10 1/2% = 0.105 (as a decimal)
Time (T) = 3 months = 3/12 years (since the interest rate is typically quoted on an annual basis)
Using the first formula:
Bank Discount = 4000 x 0.105 x (3/12)
Bank Discount = 4000 x 0.105 x 0.25
Bank Discount = 105
Using the second formula:
Proceeds = 4000 - 105
Proceeds = 3895
Therefore, the bank discount for the first loan is RM105, and the proceeds are RM3895.
ii) Loan:
Principal (P) = RM4215
Interest Rate (R) = 10% = 0.10 (as a decimal)
Time (T) = 10 June to 5 August = 2 months (since the interest rate is typically quoted on an annual basis)
Using the first formula:
Bank Discount = 4215 x 0.10 x (2/12)
Bank Discount = 4215 x 0.10 x 0.167
Bank Discount = 70.25
Using the second formula:
Proceeds = 4215 - 70.25
Proceeds = 4144.75
Therefore, the bank discount for the second loan is RM70.25, and the proceeds are RM4144.75.