"SIMPLE DISCOUNT AT AN INTEREST RATE (TRUE DISCOUNT) AND AT A DISCOUNT RATE (BANK DISCOUNT OR INTEREST IN ADVANCE). Simple discounts may be calculated in two ways: Based on an interest rate applied to the present value which results in the matured value or based on a discount rate applied to the matured value which results in the present value. The later method is most oftenused and is called the bank discount or interest in advance. The following cal- culations compare the discounts. MATURVAL is the value of the debt at the due date. RATE% is the simple interest or discount rate as a percent. ADAY1, AAMONTH1 and AYEAR1 is first or present date. BDAY2, BBMONTH2 and BYEAR2 is the second or due date. EDAYS is exact days between two dates. *** Answers to problems *** (c) Copyright PCSCC, Inc., 1993 (a) Set all variables to 0. Set BDAY2 to 270. Set MATURVAL to 3,000. Set RATE% to 12. Present value is $2755.41 and true discount is $244.59. (b) Same as in (a). Simple discount is $266.30 and present value is $2733.70. Type any key to exit. ||(a) Find the present value at 12% simple interest on $3,000 duein 9 months (270 days). What is the discount? (b) Find the simple discount on debt of $3,000 due in 9 months at a discount rate of 12%. What is the present value? Type comma key to see answers. Type (F2) to return to helpfile."
