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find the discount and proceeds on a 3270 face value note for

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find the discount and proceeds on a 3270 face value note for three months if the discount rate is 9.1%
use bankers rule
Hi,

The discount and the proceeds will be the same value:

($3270)(0.091)(90/360) = $74.39

Note that this solution assumes an average of 30 days per month. In actual use of the Banker's Rule, the exact number of days would be used, so it would be necessary to know which three months were included.

Thanks,

Ryan
Customer: replied 5 years ago.

the discount is correct

the proceeds is not

 

Hi,

Ok, I was thinking of "proceeds" from the note buyer's point of view.

From the note issuer's point of view, the proceeds are:

$3,270 - $74.39 = $3,195.61

Thanks,

Ryan
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