The amount of interest on $X for two years is $330. The amount of discount on $X for one year is $144. Find the annual effective interest rate i and the value of X. (Round your answer for i to two decimal places. Round your answer for X to the nearest cent.) X% 9.42 1672.66 X X = $ Qubault

The amount of interest on $X for two years is $330. The amount of discount on $X for one year is $144. Find the annual effective interest rate i and the value of X. (Round your answer for i to two decimal places. Round your answer for X to the nearest cent.) X% 9.42 1672.66 X X = $ Qubault

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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Concept explainers

Cost of Credit

The cost of credit is an extra amount that the borrower has to pay besides the loan amount. These credit charges may vary from loan to loan. The cost of credit includes interest charges, maintenance charges, and arrangement charges. Some of the costs are mandatorily collected by the lender based on the loan amount and tenure of the loan. The cost of credit is also called finance charges of the credit.

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The amount of interest on $X for two years is $330. The amount of discount on $X for one year is $144. Find the annual effective interest rate i and the value of X. (Round your answer for i to two
decimal places. Round your answer for X to the nearest cent.)
¡ = 9.42
X
X = $ 1672.66
X
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