ACTIVITY 1

A. Find the Bank Discount and Proceeds

FACE VALUE Discount Rate Term of Discount Bank Discount Proceeds

1 45,000.00 0.13 0.5 2,925.00 42,075.00
2 18,500.00 0.125 1 2,312.50 16,187.50
3 78,000.00 0.0825 0.36111111111111 2,323.75 75,676.25
4 23,500.00 0.113 0.13888888888889 368.82 23,131.18
5 350,000.00 0.0965 0.91666666666667 30,960.42 319,039.58

B. Finding the Effective Interest Rate

FACE VALUE Discount Rate Term of Discount Bank Discount Proceeds

1 27,000.00 0.14 0.35 1,323.00 25,677.00
2 65,050.00 0.105 0.20277777777778 1,385.02 63,664.98
3 38,000.00 0.145 0.38888888888889 2,142.78 35,857.22
4 950,000.00 0.0925 0.125 10,984.38 939,015.63
5 575,000.00 0.1275 0.63888888888889 46,838.54 528,161.46

12,000.00 0.15 0.83333333333333 1,500.00 10,500.00

15,800.00 0.55555555555556 - 15,000.00
30,000.00 0.065 1,300.00 28700
800.00 1950
8,777.78 0.67 240.00
0.091139240506
9.113924050633

0.09 0.91
19,715.22
700.00 120
20,700.00 0.05 0.33333333333333 345.00 20,355.00
80,000.00 0.05 0.33333333333333 1,333.33 78,666.67

4,000.00

28,000.00
 MV
48,128.34 0.13 0.065
21,142.86 0.125 0
80,395.10 0.0825 0.05270833333333
23,874.70 0.113 0.09730555555556
383,964.89 0.0965 0.00804166666667

Effective Rate
0.1472134595 14.72
0.1072842607 10.73
0.1536649985 15.37
0.0935820424 9.36
0.1388069857 13.88

24
0 0.00 192

106 105
77
46
15 May-15 14
60

4000
93100 0.02166666666667
0.97833333333333
95,161.84

0.03
92,390.14 1.03
Activity 2

1 FACE VALUE Discount Rate Term of Discount Bank Discount Proceeds

12,000.00 0.02 0.75 180.00 11,820.00
54,000.00 0.0725 0.505555555555556 1,979.25 52,020.75
2 7,000.00 0.15 0.25 262.50

3 5,208.33 0.16 0.25 5,000.00

4 90,000.00 0.11 0.75 7,425.00 82,575.00

5 55,612.77 0.09 0.322222222222222 54,000.00

6 65,000.00 0.095 2.5 15,437.50 49,562.50

9.50

7 120,000.00 0.12 2.22222222222222 32,000.00 88,000.00

800
MV
8 126,131.68 121,280.46 125,000.00
0.085 0.12
0.11 0.333333333333333
0.01 0.04

123,115.38 125000
0.12
0.105555555555556
0.012666666666667
0.987333333333333
126603.64618501 0.085
0.333333333333
0.028333333333
1.028333333333
123,115.38
Effective Rate
0.0203045685 2.03
0.0752584305 7.53

0.1198910082 11.99

25
38

16 Aug 15-31 16 120

107 Sep 30 46
13 Oct 31 77
Nov 30 107
Dec 13 120
120

25
38

14
31
30
31
30
31
15
182
A. Find the maturity date pf each of the following notes B. Discounting Simple Interest before maturity
Face Value IR Term
Note date Term Note Maturity date 1 80,000.00 0.114 0.138888889
Feb-14 60 Apr-15 2 110,000.00 0.145 0.191666667
May-10 75 Jul-24 3 50,000.00 0.13 0.194444444
Jul-04 90 Oct-02 4 17,000.00 0.145 0.347222222
May-02 120 Aug-30 5 30,000.00 0.16 0.222222222
Sep-27 45 Nov-11

Feb 14-28 14 46 1 Jan 13-31 18 32

March 31 15 feb 28 4
April 15 60 mar 4 50

May 10-31 21 54 july 18-31 13 56

June 30 24 aug 31 25
July 24 75 sep 25 69

July 4-31 27 63 Apr 5-30 25 45

AUG 31 32 may 31 14
SEP 30 2 jun 14 70
OCT 2 90
July 8-31 23 102
May 2-31 29 91 aug 31 71
jun 30 61 sep 30 41
july 31 30 oct 31 10
aug 30 120 nov 10 125

Feb 27-28 1 79
Sep 27-30 3 42 mar 31 48
oct 31 11 apr 30 18
nov 11 45 may 18 80
S. Interest MV Disc Per Disc Term Disc Rate Discount Proceeds
1,266.67 81,266.67 12 0.033333333 0.16 433.42 80,833.24
3,057.08 113,057.08 33 0.091666667 0.147 1,523.44 111,533.64
1,263.89 51,263.89 29 0.080555556 0.14 578.14 50,685.75
855.90 17,855.90 37 0.102777778 0.175 321.16 17,534.74
1,066.67 31,066.67 41 0.113888889 0.18 636.87 30,429.80

Feb-20 8
Mar-04 4
12

Aug-23 8
Sep-25 25
33

May-16 15
Jun-14 14
29

Oct-04 27
Nov-10 10
37

Apr-07 23
May-18 18
41
Activity 4: Word Problems
Face Value IR Term S. Interest MV Disc Per Disc Term Disc Rate
1 150,000.00 0.10 0.50 7,500.00 157,500.00 2 0.1666667 0.16

2 500,000.00 0.12 0.2638889 15,833.33 515,833.33 25 0.0694444 0.16

a. Maturity Date: Sep-12 18 77
Oct 31 46
Nov 30 16
Dec 16 95
b. Maturity Value:
515,833.33
c. Disc Date Sep-12 18 52
Oct 31 21
Nov 21 70
d. Proceeds
510,101.85

3 Face Value IR Term S. Interest MV Disc Per Disc Term Disc Rate
50,000.00 0.18 0.1666667 1,500.00 51,500.00 40 0.1111111 0.24
a. Maturity Date: Mar-21 10 50
Apr 30 20
May 20 60
b. Maturity Value:
51,500.00
c. Disc Date Mar-21 10 10
Apr 10 20
d. Proceeds
50,126.67

4 Face Value IR Term S. Interest MV Disc Per Disc Term Disc Rate
68,500.00 0.0525 0.5555556 1,997.92 70,497.92 113 0.3138889 0.07
a. Maturity Date: Apr-01 29 171
May 31 140
jun 30 110
jul 31 79
aug 31 48
sep 30 18
Oct 18 200
b. Maturity Value:
70,497.92
c. Term of Discount
Jun-27 3
 jul 31
aug 31
sep 30
Oct 18
113 days
d. Proceeds
68,948.92

5 80,800.00 PR Jun-16 14 106

0.194444444444 jul 31 75
0.11 aug 31 44
0.978611111111 sep 30 14
82,565.99 MV oct 14 120
0.333333333333
0.09 Aug-05 26
1.03 sep 30
80,161.16 FV oct 14
70 days

6 25,000.00 0.10 0.4166667 1,041.67 23,958.33

7 0.08
3
0.76
0.105263157895 10.53

8 0.06
0.666666666667
1.04
0.057692307692 5.77
Discount Proceeds
4,200.00 153,300.00

5,731.48 510,101.85

Discount Proceeds
1,373.33 50,126.67

Discount Proceeds
1,549.00 68,948.92