Tina Mier must pay a $6,250 furniture bill. A finance company will loan Tina $6,250 for 8 months at a 8.40% discount rate. The company told Tina that if she wants to receive exactly $6,250, she must borrow more than $6,250. The finance company gave the following formula: What to ask for = Amount of cash to be received + (1 - (Discount ratex 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
Tina Mier must pay a $6,250 furniture bill. A finance company will loan Tina $6,250 for 8 months at a 8.40% discount rate. The company told Tina that if she wants to receive exactly $6,250, she must borrow more than $6,250. The finance company gave the following formula: What to ask for = Amount of cash to be received + (1 - (Discount ratex 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
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Plz solve it within half n hour... And solve both parts asap i'll upvote
Transcribed Image Text:Tina Mier must pay a $6,250 furniture bill. A finance company will loan Tina $6,250 for 8 months at a 8.40% discount rate. The finance
company told Tina that if she wants to receive exactly $6,250, she must borrow more than $6,250. The finance company gave Tina
the following formula:
What to ask for Amount of cash to be received + (1 - (Discount rate x 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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