Question 3: Calculate the rate the Rent-Way charges The RentWay company advertises itself as "Rent to own program". For exan you can rent a $180 TV, and pay $8 a week for 78 weeks, then the TV becom your property. The going rate for good borrowers at the time was 8% per an Calculate the interest rate that you are charged if you get the a TV thru the RentWay company? Can you explain why these rates are required and paid. To help you answering the last question, assume that all RentWay renters are belonging to one the following two groups: group 1 ( bad credits) rents the TV never pays a penny back and does not return the TV; group 2 ( good credits) r the TV, pays $8 for 78 weeks.
Question 3: Calculate the rate the Rent-Way charges The RentWay company advertises itself as "Rent to own program". For exan you can rent a $180 TV, and pay $8 a week for 78 weeks, then the TV becom your property. The going rate for good borrowers at the time was 8% per an Calculate the interest rate that you are charged if you get the a TV thru the RentWay company? Can you explain why these rates are required and paid. To help you answering the last question, assume that all RentWay renters are belonging to one the following two groups: group 1 ( bad credits) rents the TV never pays a penny back and does not return the TV; group 2 ( good credits) r the TV, pays $8 for 78 weeks.
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:Question 3: Calculate the rate the Rent-Way charges
The RentWay company advertises itself as "Rent to own program". For example,
you can rent a $180 TV, and pay $8 a week for 78 weeks, then the TV becomes
your property. The going rate for good borrowers at the time was 8% per annum.
Calculate the interest rate that you are charged if you get the a TV thru the
RentWay company?
Can you explain why these rates are required and paid.
To help you answering the last question, assume that all RentWay renters are
belonging to one the following two groups: group 1 ( bad credits) rents the TV,
never pays a penny back and does not return the TV; group 2 (good credits) rents
the TV, pays $8 for 78 weeks.
Can you estimate what is the proportion of group 2 customers among the
RentWay clients?
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