na Mier must pay a $3,500 furniture bill. A finance company will loan Tina $3,500 for 8 months at a 12.60% discount rate. The fina ompany told Tina that if she wants to receive exactly $3,500, she must borrow more than $3,500. The finance company gave Tina the following formula: What to ask for Amount of cash to be received-(1-(Discount rate Time of loan)) a. Calculate Tina's loan request. Note: Do not round Intermediate calculations. Round your final answer to the nearest cent. Loan request b. Calculate the effective rate of interest. Note: Do not round intermediate salsulations. Round your final and
na Mier must pay a $3,500 furniture bill. A finance company will loan Tina $3,500 for 8 months at a 12.60% discount rate. The fina ompany told Tina that if she wants to receive exactly $3,500, she must borrow more than $3,500. The finance company gave Tina the following formula: What to ask for Amount of cash to be received-(1-(Discount rate Time of loan)) a. Calculate Tina's loan request. Note: Do not round Intermediate calculations. Round your final answer to the nearest cent. Loan request b. Calculate the effective rate of interest. Note: Do not round intermediate salsulations. Round your final and
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:Tina Mier must pay a $3,500 furniture bill. A finance company will loan Tina $3,500 for 8 months at a 12.60% discount rate. The finance
company told Tina that if she wants to receive exactly $3,500, she must borrow more than $3,500. The finance company gave Tina
the following formula:
What to ask for Amount of cash to be received-(1-(Discount rate Time of loan))
a. Calculate Tina's loan request.
Note: Do not round intermediate calculations. Round your final answer to the nearest cent.
Loan request
b. Calculate the effective rate of Interest.
Note: Do not round intermediate calculations. Round your final answer to the nearest hundredth percent.
Effective rate of interest
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