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A building contractor gives a ​$14,500 promissory note to a plumber who has loaned him ​$14,500. The note is due in 9 months with interest at 9​%. Six months after the note is​ signed, the plumber sells it to a bank. If the bank gets a 10​% return on its​ investment, how much will the plumber​ receive? Will it be enough to pay a bill for ​$15,400​?

Respuesta :

sqdancefan

Answer:

  • $15,101.22
  • no

Step-by-step explanation:

The value of the note at maturity is ...

  A = P(1 +rt) = $14,500(1 +0.09(9/12)) = $15,478.75

The amount (P) the bank will pay for the note is ...

  A = P(1 +rt)

The bank wants an equivalent rate of 10% on its 3-month investment.

  $15,478.75 = P(1 +.10(3/12)) = 1.025P

  P = $15,478.75/1.025 = $15,101.22

The bank will pay the plumber $15,101.22 for the note. That is not enough to pay a bill for $15,400.