TUTORIAL 2

(Bank Discount and Promissory Notes)

P
1. A 120 – day promissory note for RM 2,500 is dated 17 June 2002. Find
a. the due date
b. the maturity value M

if the rate is 6 % ordinary simple interest. PC1 + rt)

S b) =

1
17

I
30 =

I
17/6
06())
-

s = 2500 (1 + 0 .

7
105
8 day
S=
I 38
RM2550
15/10/ 15

al due date :
15/10/2000
2. A promissory note for RM 1,400 is dated 15 July 2002 and has a due date of 15 October 2002. Find
a. the term of the note
b. the maturity value
if the rate is 8 % per annum.
b) Maturity value S
9) 15/7 >
-
15/10 ,

s PCI + rt)
'
=
15/7
J !
s =
1400 (1 + 0 00 .

(0))
9 30
15/10 15 s = 1428 62.

~
-

92 days
~

3. The maturity value of a 90 day interest bearing promissory note is RM 3,500. If the interest
rate is 6 % per annum, find the face value of the note.
S = RM3500 s = PC1 + rt)
r 6% =
0 06
(sol)
RM344806
= .

3500 = PCI +
face value
=?

P= p =

060

34218 28
.

4. Fariza borrows RM5, 000 for 9 months from a lender who charges a discount rate of 12 %. Find
a. the discount D
b. the proceeds. Pr
D) Pr = S -
D
5000 (0-121Ce
a) C
=
Sat D =
=
5000-450
= RM458
RM5080
RM4550
=
S
S
=
~
d = 0 12.

t=
I
5. If Yusry needs RM 9,500 now, how much should he borrow for 5 ½ years from a bank that
S
charges 6.5 % bank discount.
Pr =
s (1 dt)
RM500 9500
-

P =

065))

See
+ -- 5/2 years - E years
5 = 1 -0 .

= RM14785 .
99
6 5% 865
d= = 0
↓
.

~
.

S =
?
05 (52)

S
99
=
RM14785 .

6. Compute the discount amount and the proceeds for a 90 - day loan of RM 80,000 that has a
bank discount rate of 9 %. -
S

Discount) Proceeds Pr = S
-
D

=
80000 -
1800
Discount =
D
J = RM80000 =
RM78200
D = Sat ~
d= 0 09 (0 09) ()
.

D 60000
.
=

200
t=
D =
RM1800
-
5. If Yusry needs RM 9,500 now, how much should he borrow for 5 ½ years from a bank that
charges 6.5 % bank discount.

6. Compute the discount amount and the proceeds for a 90 - day loan of RM 80,000 that has a
bank discount rate of 9 %.