Question

find the proceeds of a simple discount loan with a $3,500 maturity value, 11.3% simple discount rate, and a 250 day term.

Explanation:

Step1: Define discount formula

The simple discount $D$ is calculated as $D = M \times d \times t$, where $M$ is maturity value, $d$ is discount rate, $t$ is time in years.

Step2: Calculate time in years

$t = \frac{250}{365}$

Step3: Compute the discount

$D = 3500 \times 0.113 \times \frac{250}{365}$
$D = 3500 \times 0.113 \times 0.684932$
$D \approx 3500 \times 0.0774$
$D \approx 270.90$

Step4: Find proceeds (P)

Proceeds = Maturity value - Discount: $P = M - D$
$P = 3500 - 270.90$

Answer:

$\$3229.10$