4) Jim has been offered a substantial cash discount if he pays an invoice 60 days earlier. One bank will loan him the needed money at 11% simple interest rate. A second bank will also loan him the money, but at bank discount rate. What is the maximum discount rate that Jim can accept at the second bank, so that he does not pay more interest than at the first bank ?

What is the 2nd bank's discount rate?

To answer this question, we need to compare the interest charges at the first bank with the interest charges at the second bank. Let's break down the steps to find the maximum discount rate that Jim can accept at the second bank:

1. Calculate the interest charges at the first bank:
- Determine the amount of money Jim needs to borrow to pay the invoice.
- Calculate the simple interest for the loan at 11% for the time period it will take for Jim to pay off the loan (60 days earlier).

2. Determine the total amount Jim needs to repay the first bank:
- Add the borrowed amount and the interest charges.

3. Calculate the loan amount from the second bank:
- Subtract the cash discount offered from the invoice amount.

4. Calculate the interest charges at the second bank:
- Determine the time period for the loan at the bank discount rate.
- Calculate the interest charges using the formula: Interest = (Loan Amount * Discount Rate * Time Period).

5. Compare the interest charges at the first and second banks:
- Check which bank offers a lower interest charge.
- If the interest charge at the second bank is higher than the interest charge at the first bank, it means Jim will pay more interest.

6. Find the maximum discount rate Jim can accept at the second bank:
- Determine the maximum discount rate that will make the interest charge at the second bank equal to or less than the interest charge at the first bank.
- Adjust the discount rate until the interest charge at the second bank matches the interest charge at the first bank.

By following these steps, we can determine the maximum discount rate that Jim can accept at the second bank without paying more interest than at the first bank.