A merchant is offered a 5% discount for immediate payment of a bill which is due in 90 days. What is the largest simple interest at which the merchant could afford to borrow in order to pay in cash today? Answer: 21% 2. A businessman invest P 100000 right now. He then received two payments P109460 one at the end of 3 years and one at the end of the 6th year. Calculate the rate of return of the investment (the interest compounded annually) Answer: 20%
A merchant is offered a 5% discount for immediate payment of a bill which is due in 90 days. What is the largest simple interest at which the merchant could afford to borrow in order to pay in cash today? Answer: 21% 2. A businessman invest P 100000 right now. He then received two payments P109460 one at the end of 3 years and one at the end of the 6th year. Calculate the rate of return of the investment (the interest compounded annually) Answer: 20%
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Show solution numbers 1 and 2 on how the answer is obtained using interest formulas
1. A merchant is offered a 5% discount for immediate payment of a bill which is due in 90 days. What is the largest simple interest at which the merchant could afford to borrow in order to pay in cash today?
Answer: 21%
2. A businessman invest P 100000 right now. He then received two payments P109460 one at the end of 3 years and one at the end of the 6th year. Calculate the rate of
Answer: 20%
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