Secondary Sales: The Bond Market Roger loaned Rafael $$ \$ 25,000 $$ for 120 days at $$ 7.25 \% $$ simple interest. 30 days later he sold the note to Novak, at an $$ 8.25 \% $$ simple discount Numeric 1 point rate.

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To determine how much Novak paid Roger for the note, we'll follow these steps:

1. **Calculate the Future Value of the Loan:**

Roger loaned Rafael \$25,000 at a simple interest rate of 7.25% for 120 days.

$$
   \text{Interest} = P \times r \times t = \$25,000 \times 0.0725 \times \left(\frac{120}{360}\right) = \$604.17
   $$

$$
   \text{Future Value} = P + \text{Interest} = \$25,000 + \$604.17 = \$25,604.17
   $$

2. **Determine the Remaining Time:**

Roger sells the note after 30 days, so Novak will hold it for the remaining:

$$
   120 \text{ days} - 30 \text{ days} = 90 \text{ days}
   $$

3. **Calculate the Present Value Using Simple Discount:**

Novak purchases the note at an 8.25% simple discount rate for 90 days.

$$
   t = \frac{90}{360} = 0.25 \text{ years}
   $$

$$
   \text{Present Value} = \frac{F}{1 + d \times t} = \frac{\$25,604.17}{1 + 0.0825 \times 0.25} = \frac{\$25,604.17}{1.020625} \approx \$25,087.34
   $$

**Final Answer:**

Novak paid approximately **\$25,087.34** for the note.
Novak paid approximately \$25,087.34 for the note.

Secondary Sales: The Bond Market Roger loaned Rafael \( \$ 25,000 \) for 120 days at \( 7.25 \% \) simple interest. 30 days later he sold the note to Novak, at an \( 8.25 \% \) simple discount Numeric 1 point rate.

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