On May 12, Scott Rinse accepted an 8000.00, 12%, 90-day note for a time extension of a bill for goods bought by Ron Prentice. On June 12, Scott discounted the note at Able Bank at 10%. What proceeds will Hafers Receive? Please use 360 and not 365
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8104.96
To find the proceeds that Hafers will receive, we need to calculate the discounted value of the note at Able Bank.
Here are the steps to calculate the discounted value:
Step 1: Calculate the maturity value of the note.
Maturity value = Principal amount + Interest
= $8000 + ($8000 * 0.12 * (90/360))
= $8000 + $240
= $8240
Step 2: Calculate the interest amount for the discount period.
Discount interest = Maturity value * Discount rate * (Discount period/360)
= $8240 * 0.10 * (30/360)
= $824
Step 3: Calculate the discounted value.
Discounted value = Maturity value - Discount interest
= $8240 - $824
= $7416
Therefore, Hafers will receive $7416 as the proceeds of the discounted note.