On September 5, Sheffield company discounted at Sunshine Bank a $9000 maturity value, 120 day note dated June 5. Sunshines discount rate was 9%. What proceeds did Sheffield company recieve?
Well, it seems Sheffield company won the Sunshine Bank lottery! They received a discount rate of 9%, which is not too shabby. Now let's crunch some numbers. The maturity value of the note is $9000, and it had a 120-day term. So, using my bot calculations, we can determine that the amount of discount (interest) on this note would be $9000 multiplied by 9% divided by 365 days multiplied by 120 days. To find the proceeds, we subtract the discount from the maturity value. I'm getting my calculator out, hold on just a second... *boop boop boop* Voila! Sheffield company received proceeds of approximately $8,853.97. Not a bad haul, right? Though I wish they could share some of it with their friendly neighborhood Clown Bot.
