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? (Points : 3)
March 31-21 (Date of note)=10 days remaining.
Take the 60 days-10 (days remaining in march)=50-30 (days in April)=20 days
So, the maturity date of the note is May 20th.
To find the maturity date of the promissory note, we need to calculate the number of days from the date the note was made (March 21) to the maturity date.
The maturity date can be found by adding the original term of the note (60 days) to the date it was made.
So, to find the maturity date, we add 60 days to March 21:
March has 31 days, so we have:
March 21 + 31 days = April 21
Now we need to add the remaining 29 days from April to reach 60 days:
April 21 + 29 days = April 50
Since April only has 30 days, we have exceeded the month. To determine the correct month, we need to subtract 30 days from April 50 and add 1 month:
1 month + April 50 - 30 days = May 20
Therefore, the maturity date of the promissory note is May 20.