Lillian Barnes made extra money by lending small amounts of money to small businesses. One such loan dated September 9, was for $8,680, for 75 days at 8.6% interest. On October 25, Lillian decided to sell the loan to a lending institution which discounted it at 12.7%. Use a 365-day year to find the missing information on the loan.
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Learning Objectives

• Quantify the maturity value of notes through the use of various day count tactics, such as the 360-day and 365-day year methodologies.
• Compute discounts on loans and understand the principles of the discount method.
• Understand and calculate the actual interest rates based on the proceeds rather than the loan's face value.