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Ch.+9+Problem+Solutions

# Ch.+9+Problem+Solutions - Problem 9-1B(45 minutes Wolf...

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Problem 9-1B (45 minutes) Wolf Products Autumn Bank City Bank 1. Maturity dates Date of the note ......................... May 23 July 15 Dec. 6 Term of the note (in days) ........ 60 90 90 Maturity date .............................. July 22 Oct. 13 Mar. 6 2. Interest due at maturity Principal of the note .................. \$5,400 \$8,500 \$9,600 Annual interest rate .................. 8% 8% 6% Fraction of year ......................... 60/360 90/360 90/360 Interest expense ........................ \$ 72 \$ 170 \$ 144 3. Accrued interest on City Bank note at the end of 2008 Total interest for note .............................................................. \$ 144 Fraction of term in 2008 ........................................................... 25/90 Accrued interest expense ....................................................... \$ 40 4. Interest in 2009 Total interest for note .............................................................. \$ 144 Fraction of term in 2009 ........................................................... 65/90 Interest expense in 2009 .......................................................... \$ 104 Problem 9-1B (Concluded)

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