The Loan Proceeds is express as :
Proceeds = Maturity Value - Bank Discount
where,
Bank Discount = Maturity Value × Discount Rate × Period of Discount
In the given question we have,
Maturity value = $25,000
Discount Rate = 14%
Period of Discount = 290 days
Substitute the values and find the Bank discount
[tex]\begin{gathered} \text{ Bank Discount = Maturity Value }\times\text{ Discount Rate } \\ \text{ Bank Discount = 25000}\times0.14 \\ \text{Bank Discount = 350}0 \end{gathered}[/tex]Now substitute the value of Bank Discount in the expression of Proceeds
[tex]\begin{gathered} \text{Proceeds = Maturity value - Bank Discount} \\ \text{Proceds = 25000-3500} \\ \text{Proceds = 21500} \end{gathered}[/tex]Answer : Proceeds = $21500
