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Compute the cash proceeds from the discounted note

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Question - A company received in payment for merchandise sold an interest-bearing note with a face amount of $1,000, an annual interest rate of 16 percent, and a term of six months. The company sold this note to a local bank, at a discount rate of 15 percent, when the note had 60 days remaining to maturity. Compute the cash proceeds from the discounted note amounted (assume 360 days per year)?

A. $1,080

B. $1,053

C. $1,010

D. $975

Reference no: EM132570135

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