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A client would like you to explain some options he has regarding discounting of a 6 percent, 60-day, $ 2,400 note receivable. He wants to know what he will receive in proceeds and what his interest income (or expense) will

A client would like you to explain some options he has regarding discounting of a 6 percent, 60-day, $ 2,400 note receivable. He wants to know what he will receive in proceeds and what his interest income (or expense) will be if he discounts the note
(a) After 10 days with a discount rate of 7 percent,
(b) After 50 days with a 7.5 percent discount rate,
(c) After 5 days with a discount rate of 6.5 percent.
Make the calculations for the client and explain the different outcomes to him. Discount Rate
Depending upon the context, the discount rate has two different definitions and usages. First, the discount rate refers to the interest rate charged to the commercial banks and other financial institutions for the loans they take from the Federal...

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a After 10 days at 7 percent Interest Income 0 43 2 400 00 0 06 60 360 24 00 interest 2 400 00 24 00 …View the full answer


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Related Book For  answer-question
College Accounting

College Accounting

ISBN: 978-1111528126

11th edition

Authors: Tracie Nobles, Cathy Scott, Douglas McQuaig, Patricia Bille

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Posted Date: October 21, 2014 02:33:39
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