Tim is expecting a $934 paycheck in 4 days. A payday lender offers to give him cash now for this check. The lender’s fee is 2.5% of the amount of the paycheck, plus a $5 service fee. What is the simple discount rate? Group of answer choices 28.35% 255.89% 5.26% 2.77% 276.97%
Tim is expecting a $934 paycheck in 4 days. A payday lender offers to give him cash now for this check. The lender’s fee is 2.5% of the amount of the paycheck, plus a $5 service fee. What is the simple discount rate? Group of answer choices 28.35% 255.89% 5.26% 2.77% 276.97%
Advanced Engineering Mathematics
10th Edition
ISBN:9780470458365
Author:Erwin Kreyszig
Publisher:Erwin Kreyszig
Chapter2: Second-order Linear Odes
Section: Chapter Questions
Problem 1RQ
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Question
Tim is expecting a $934 paycheck in 4 days. A payday lender offers to give him cash now for this check. The lender’s fee is 2.5% of the amount of the paycheck, plus a $5 service fee. What is the simple discount rate?
Group of answer choices
28.35%
255.89%
5.26%
2.77%
276.97%
Expert Solution
Step 1
We have to find the simple discount rate.
Let the discount rate is .
Use the formula which is given below.
Hence, .
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