math

A man makes a simple discount note with a face value of $2,200, a term of 140 days, and a 9% discount rate. Find the discount.

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  1. Discount is calculated by the formula:

    Discount
    = Maturity value * discount rate * discount period.

    Here I assume "face value" is what the bearer receives on maturity.

    So discount
    = 2200*0.09*140/365
    = $75.95

    You can read the following link for more details:
    http://www.cliffsnotes.com/more-subjects/accounting/accounting-principles-i/receivables/discounting-notes-receivable

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