Simple Interest

1. Simple Interest Discounting a Note Before Maturity

2. Objective 1 Understand the concept of discounting a note.

3. Notes Notes can be bought and sold just like any other tangible item.

4. Discounting a Note

5. The Basics Simple Interest Note Simple Interest Note $5000 6% interest 150 days How much will you get if you keep this note for the entire term?

6. The Basics Simple Interest Note What if you �bail-out� early?

7. The Basics Simple Discount Note Simple Discount Note $9000 5% interest 120 days How much will you get if you keep this note for the entire term?

8. The Basics Simple Discount Note What if you �bail-out� early?

9. Discounting a Note Find the proceeds when discounting simple interest notes.

10. Discounting a Note

12. Discounting a Note 1 of 1 #11, page 344 Loan made on: July 10 Face Value: $2000 Length of Loan: 72 days Rate: 11% Date of Discount: Aug. 2 Discount Rate: 12%

13. Discounting a Note Find the proceeds when discounting simple discount notes.

17. Practice MathXL: Ch 8 Section 4 Homework