Face value of bearing note required

Question

Suzie wants to buy a car for $\$7500$. If she pays cash she receives a $5$% cash discount. To get the cash she signs a $120$-day non-interest bearing note. If the bank discounts notes at an interest rate of $5.5$% what face value is needed on the note for Suzie to receive the cash she needs to buy the car?

Not entirely sure how to answer this question. Right from the start if Suzie pays the $7500$ she will get $5$% discounted therefore she needs $\$7125$ for the car.

Please help

Answer 1

As you say, she needs to receive $7125$ from the bank. The bank needs to receive $5.5\%$ annual interest for $120$ days, so compute what $7125$ would grow to in that time. You need to check your definition of discounting to find how the interest is compounded.