Mathematics: Determine the proceeds of a 10year promissory note discounted after after 4 years at 6% compounded quarterly with a maturity value of $6000

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Determine the proceeds of a 10year promissory note

endreu2005

10.01.2022

The Proceeds of maturity after 10 years is $1613.4

Step-by-step explanation:

Given as :

The maturity value = $ 6000

The rate applied at 6 % compounded quarterly

The Time period = 4 years

Now,

Amount = Principal × $(1+\dfrac{\textrm Rate}{4\times 100})^{\textrm 4\times Time}$

Or, Amount = 6000 × $(1+\dfrac{\textrm 6}{4\times 100})^{\textrm 4\times 4}$

Or, Amount = 6000 × $(1.015)^{16}$

Or, Amount = 6000 × 1.2689

∴ Amount = $ 7613.4

So, The proceeds after 10 years = $ 7613.4 - $ 6000 = $ 1613.4

Hence The Proceeds of maturity after 10 years is $1613.4 Answer

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