Assume the Time from Acceptance to Maturity on a $4,000,000

Assume the time from acceptance to maturity on a $4,000,000 banker's acceptance is 180 days.Further assume that the importing bank's acceptance commission is 1.25 percent and that the market rate for 90-day B/As is 6.0 percent.Calculate the amount the exporter will receive if he holds it to maturity.

A) $3,993,750
B) $3,999,375
C) $3,975,000
D) $3,009,375

Correct Answer:

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