Future Business Leaders of America (FBLA) Business Calculations Practice Test

A $6000 note at a 12% discount rate for 270 days will yield proceeds of:

1. $540

2. $6540

3. $720

4. $5460

The correct answer is: $5460

To find the proceeds from a note based on the discount rate, it is essential to calculate the amount of discount applied to the note based on the face value, discount rate, and the time period involved. First, we can calculate the discount amount. The formula for calculating the discount is: \[ \text{Discount} = \text{Face Value} \times \text{Discount Rate} \times \left(\frac{\text{Time}}{360}\right) \] Using the given values: - Face Value = $6000 - Discount Rate = 12% (or 0.12 as a decimal) - Time = 270 days Substituting these values into the formula gives: \[ \text{Discount} = 6000 \times 0.12 \times \left(\frac{270}{360}\right) \] Calculating the fraction of the year: \[ \frac{270}{360} = 0.75 \] Now plug this back into the discount calculation: \[ \text{Discount} = 6000 \times 0.12 \times 0.75 \] Calculating this step-by-step: 1. \( 6000