 | Promissory Notes, Simple Discount Notes, and the Discount Process
Learning Objectives
LU 11–1: Structure of Promissory Notes; the Simple Discount Note- Differentiate between interest-bearing and noninterest-bearing notes.
- Calculate bank discount and proceeds for simple discount notes.
- Calculate and compare the interest, maturity value, proceeds, and effective rate of a simple interest note with a simple discount note.
- Explain and calculate the effective rate for a Treasury bill.
LU 11–2: Discounting an Interest-Bearing Note before Maturity- Calculate the maturity value, bank discount, and proceeds of discounting an interest-bearing note before maturity.
- Identify and complete the four steps of the discounting process.
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