A borrower has two alternatives for a loan: (1) iss ue a $570,000, 30-day, 6% note or (2) issue a S 570,000, 30-day note that the creditor discounts at 696 a. Calculate the amount of the interest expense for each option. Assume a 360-day year for each alternative. b. Determine the proceeds received by the borrower in each situation. (1) $570,000, 30-day, 6% simple-interest (2) $570,000, 30-day note discounted at 6% e. Alternative s more favorable o the bomo ver since the effective interest rate on alternative t is 6% and the effective rate on alternative 2 S 603 A 360-day year is used when calculating interest on a note Recall the definition of proceeds is the amount that the borrower receives in cash or Consider amount of money available for use Consider the effective i Next Previous