Math Problem Statement
Solution
Let's go through the problem step-by-step.
- Identify the details:
- Date received: 25 June 2016
- Term: 90 days
- Discounted on: 31 July 2016
- Discount rate: 9.75%
- Proceeds: RM 8,450
- Simple interest rate: 9%
Let's solve each part.
a) The Maturity Date
The note has a 90-day term starting from 25 June 2016.
- June has 5 remaining days (since it's a 30-day month).
- July has 31 days.
- August would cover the remaining days up to 90.
Adding up:
- June: 5 days
- July: 31 days
- Total so far: 5 + 31 = 36 days
Remaining days: 90 - 36 = 54 days, which falls into August.
Therefore, the maturity date is:
- 31 July + 54 days ≈ 23 September 2016.
b) The Maturity Value
To find the maturity value (), use the proceeds formula under discounting: Where:
- Proceeds = RM 8,450
- Discount rate () = 9.75% or 0.0975
- Time () = days between 31 July and 23 September = 54 days
Rearrange to solve for :
Let's calculate this in detail next, but to confirm, do you have any questions or need clarification up to this point?
If you're interested, here are related questions:
- What is a promissory note?
- How is the maturity date of a promissory note calculated?
- What is the difference between simple and compound interest?
- Why is the discount rate applied in this context?
- How do discount and simple interest rates compare in financial products?
Tip: For problems with dates, it's often helpful to break down the days month by month to avoid errors.
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Math Problem Analysis
Mathematical Concepts
Discounting
Simple Interest
Promissory Note
Time Value of Money
Formulas
Proceeds = Maturity Value × (1 - Discount Rate × Time/360)
Maturity Value = Proceeds / (1 - Discount Rate × Time/360)
Theorems
Simple Interest Theory
Discounting Theory
Suitable Grade Level
Grades 10-12
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