Varsity Press, a publisher of college textbooks, received a $70,000 promissory note at 12% ordinary interest for 60 days from one of its customers, Reader’s Choice Bookstores. After 20 days, Varsity Press discounted the note at the Grove Isle Bank at a discount rate of 14.5%. The note was made on March 21. What was the maturity date of the note
May 20th
What was the discount date of the note from the previous question? (Points : 2)
To determine the maturity date of the promissory note, we need to consider the original term and any changes made due to the discounting process.
Step 1: Find the original term of the note.
The note was made on March 21, and the term mentioned is 60 days. To calculate the original maturity date, we add 60 days to the start date.
March 21 + 60 days = May 20
Step 2: Determine the remaining term after the discounting.
The note was discounted at the Grove Isle Bank after 20 days. Therefore, we need to subtract those 20 days from the original 60-day term to find the remaining term.
60 days - 20 days = 40 days
Step 3: Calculate the maturity date after the discounting.
To find the new maturity date, we add the remaining term of 40 days to the date of the discounting.
May 20 + 40 days = June 29
Therefore, the maturity date of the note is June 29.