Subjects finance

Face Value Note

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Face Value Note


1. **Problem statement:** Find the face value of a 90-day promissory note when the interest is RM200 and the interest rate is 8% per annum. 2. **Step 1: Write down the known values.** - Interest, $I = 200$ - Time, $t = 90$ days = $\frac{90}{365}$ years - Interest rate, $r = 8\% = 0.08$ per annum 3. **Step 2: Use the simple interest formula:** $$I = P \times r \times t$$ where $P$ is the face value (principal). 4. **Step 3: Rearrange the formula to solve for $P$:** $$P = \frac{I}{r \times t}$$ 5. **Step 4: Substitute the known values:** $$P = \frac{200}{0.08 \times \frac{90}{365}} = \frac{200}{0.08 \times 0.246575} = \frac{200}{0.019726}$$ 6. **Step 5: Calculate $P$:** $$P \approx 10139.68$$ 7. **Answer:** The face value of the note is approximately RM10139.68.