Looking for some help on this question.

1. Find the proceeds of a promissory note with a maturity value of $1600 due on July 31, 2023, discounted at 9.9% compounded quarterly on April 30, 2021

The proceeds are $_____?

Haymour Apr 1, 2021

#1**+3 **

I have forgotten what many of these words mean.

If you tell us what you already understand of the question then maybe you will be more likely to get a helpful answer.

Does it mean that you have to pay $1600 total on the 31st July 2023

But if you pay early you will pay less (because less interest is added) so if you pay it out on 30th April you will pay a discounted price.

Mmm, that sounds feasable.

So you are going to pay it out 2 years and 3 months early. That is 11 quarter years

Interest rate per quarter = 9.9% / 4 = 2.475% = 0.02475

\(discounted \;\;amount = $1600*(1-0.02475)^{11}\\ discounted \;\;amount = $1600*(0.97525)^{11}\\ discounted \;\;amount \approx $1600*0.759059\\ discounted \;\;amount \approx 1214.494442\\~\\ discounted \;\;amount \;\;payable \;\;is\;\; $1214.49\\\)

Melody Apr 1, 2021

#2**+2 **

**NOT POSITIVE OF THIS ANSWER **

**MY ASSUMPTION IS how much is needed in April to have 1600 nine quarters later?**

From April 30, 2021 to July 31, 2023 is ** NINE** quarters (Melody used 11 here....hmmmmmm I think she added 8 quarters and 3 months =11)

9.9% is .099 in decimal .... the period (quarter) interest is .099/4 = .02475

1600 = x (1 + .02475)^{9}

x = $ 1283.98

SO the PROCEEDS would be 1600 - 1293.98 = $ 316.02

ElectricPavlov Apr 1, 2021