Question: A borrower has two alternatives for a loan: (1) issue a $210,000, 120-day, 7% note or (2) issue a $210,000, 120-day note that the

A borrower has two alternatives for a loan: (1) issue a $210,000,

A borrower has two alternatives for a loan: (1) issue a $210,000, 120-day, 7% note or (2) issue a $210,000, 120-day note that the creditor discounts at 7%. Assume a 360-day year. a. Calculate the amount of the interest expense for each option. for each alternative. b. Determine the proceeds received by the borrower in each situation. (1) $210,000, 120-day, 7% interest-bearing note (2) $210,000, 120-day note discounted at 7% c. Alternative is more favorable to the borrower because the borrower

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