Hafers, an electrical supply company, sold $4,800 of equipment to Jim Coates Wiring, Inc. Coates signed a promissory note May 12 with 4.5% interest. The due date was August 10. Short of funds, Hafers contacted Charter One Bank on July 20; the bank agreed to take over the note at a 6.2% discount. What proceeds will Hafers receive? Use the ordinary interest method.
Proceeds:
So far I have tried: 4800 x 4.5 x 69/360 (69 because he paid up to 69 days by himself) = 41.4
can't figure out whether you do this 4800 x 6.2 x 21/360 or 41.4 x 6.2 x 21/360 (he asked the bank to take over so he has to still pay 21 days until the amount is paid).
I'm stuck there.
Proceeds:
So far I have tried: 4800 x 4.5 x 69/360 (69 because he paid up to 69 days by himself) = 41.4
can't figure out whether you do this 4800 x 6.2 x 21/360 or 41.4 x 6.2 x 21/360 (he asked the bank to take over so he has to still pay 21 days until the amount is paid).
I'm stuck there.