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27 May, 12:43

Abe Corp. discounted a 120-day note with a maturity value of $8,000 dated June 8 at the Village Bank on Sept. 2, at a discount rate of 9%. Use ordinary interest. How much did Abe receive?

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  1. 27 May, 16:21
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    Abe receive = $ 7767

    Explanation:

    Abe receive = (maturity Value) / (1 + discount rate*120/360)

    Abe receive = 8000 / (1 + 9%*120/360)

    Abe receive = $ 7767
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