Given
A note for $10,500 at a discount rate of 5%, for 30 months
find out proceeds of note.
To proof
As given in the question
Principle = $10,500
rate = 5%
Time = 30 months
First convert months into years
1 year = 12 months
[tex]1 month = \frac{1}{12} year[/tex]
thus
[tex]Time = \frac{30}{12} year[/tex]
= 2.5 year
FORMULA
[tex]Simple\ interest = \frac{principle\times rate\times time}{100}[/tex]
putting the above value
we get
[tex]Simple\ interest = \frac{10500\times 5\times 2.5}{100}[/tex]
[tex]Simple\ interest = \frac{131250}{100}[/tex]
simple interest =$ 1312.5
proceeds of note = $ 1312.5
total value = $10,500 + $ 1312.5
= $ 11812.5
Hence proved
