A business issued a $9000, 120-day note to a supplier which discounted the note at 9%. The proceeds are:
To find the proceeds from the discounted note, you need to calculate the discount amount and subtract it from the face value of the note.
Step 1: Calculate the discount amount.
Discount = Face Value × Discount Rate × Time
= $9000 × 9% × (120/365)
= $9000 × 0.09 × 0.3288
≈ $263.16
Step 2: Determine the proceeds.
Proceeds = Face Value − Discount
= $9000 − $263.16
≈ $8736.84
Therefore, the proceeds from the discounted note are approximately $8736.84.