A Non-Interest Bearing Long Term Promissory Note Is Due on February

A non-interest bearing long term promissory note is due on February 1,2011.The loan amount was $30,000.On October 15^th,2010 the note was sold to a bank that charges interest at j₁₂ = 12%.How much did the bank pay for this note? Assume the practical (or approximate) method is used for fractional time periods.

A) $28,962.10
B) $28,952.61
C) $28,829.41
D) $28,675.35

Correct Answer:

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