For services rendered, an attorney accepts a 120-day note for $4,300 at 7% simple interest from a client. (Both interest and principal are repaid at the end of 120 days.) Wishing to use her money sooner, the attorney sells the note to a third party for $4,350 after 30 days. What annual interest rate will the third party receive for the investment? The third party will receive an annual interest rate of 9.18%. (Type an integer or decimal rounded to two decimal places as needed.)
For services rendered, an attorney accepts a 120-day note for $4,300 at 7% simple interest from a client. (Both interest and principal are repaid at the end of 120 days.) Wishing to use her money sooner, the attorney sells the note to a third party for $4,350 after 30 days. What annual interest rate will the third party receive for the investment? The third party will receive an annual interest rate of 9.18%. (Type an integer or decimal rounded to two decimal places as needed.)
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:For services rendered, an attorney accepts a 120-day note for $4,300 at 7% simple interest from a client. (Both
interest and principal are repaid at the end of 120 days.) Wishing to use her money sooner, the attorney sells the note
to a third party for $4,350 after 30 days. What annual interest rate will the third party receive for the investment?
The third party will receive an annual interest rate of 9.18%.
(Type an integer or decimal rounded to two decimal places as needed.)
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