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Find Effective Interest Rate of a Simple Discount Note

✔ https://StudyForce.com ✔ https://Biology-Forums.com ✔ Ask questions here: https://Biology-Forums.com/index.php?... Follow us: ▶ Facebook:   / studyforceps   ▶ Instagram:   / studyforceonline   ▶ Twitter:   / studyforceps   To find the true or effective interest rate of a simple discount note: Step 1: Find the bank discount (interest). I=PRT Step 2: Find the proceeds: proceeds = principal – bank discount. Step 3: Find the effective interest rate: R=I/PT (using the proceeds as the principal) Q1. What is the effective interest rate of a $5,000 simple discount note, at an ordinary bank discount rate of 12%, for 90 days? Q2. Mihoc Trailer made a note for $10,000 with Darcy Mihoc, owner, at 9% simple interest based on exact interest and exact time. The note is made on August 12 and due November 10. Since Mihoc Trailer needs cash, the note is sold to a third party on September 5. The third-party agrees to accept the note with a 13% annual discount using the banker’s rule. Find the proceeds of the note.