accepted a $10,000, 120 day note march 3 at 8.5% to settle a past due account receivable,discounted the note to raise cash on may 10 at a discounted rate of 9% , what proceed did receive?

accepted a $10,000, 120 day note march 3 at 8.5% to settle a past due account receivable,discounted the note to raise cash on may 10 at a discounted rate of 9% , what proceed did receive?
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1 Answer

Maturity value of the note is 10000+10000×120/365×0.085=$10279.45.

Term of discount is 28+30+10=68 days.

Value of discount = 10000×68/365×0.09=$167.67

So proceeds = 10279.45-167.67=$10111.78.

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