"DISCOUNTING PROMISSORY NOTES. A promissory note may be sold many times before maturity. Each person discounts the maturity value of the notefrom the date of the sale to the maturity date at his/her own discount rate. The method most often used is called the bank discount or interest in advance. FACEVAL is the face value of the note. MATURVAL is the value of the debt at the due date which includes any simple interest at the rate FACRATE%. DISRATE% is the 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 DISCDAYS to 300. Set discount rate DISRATE% to 16. Set FACEDAYS to 360. Set FACEVAL to 6,000. Set FACRATE% to 8. The proceeds of the sale is the present value (PRESVALD) of $5616. Type any key to return to equation screen. ||(a) Find the proceeds of the sale 10 months (300 days) before the due date of Mr. John Smith's $6,000 note at a simple interest rate of 8% for12 months (360 days), if a 16% discount is applied by Mrs. R. B. Jones. Type comma key to see answers. Type (F2) to return to helpfile."
