Posted by Queen on Saturday, December 8, 2012 at 7:56pm.
For the simple loan what is the interest rate paid for 9 months?
Interest paid = .08(9/12)(12,000) = 720
r = what you paid/what you got = 720/12,000 = .06
what is the real interest rate on the discounted loan?
Well, how much is the nominal interest paid?
I = .07 * (9/12)(12,000) = 630 looks cool but
what you got = 12,000 - 630 = 11,370
so
r = 630/11370 = .055
so you are half a percent better off with the discounted loan, although you walk out of the bank with less than the 12,000 you needed.
Related Questions
Math - 1. Jacksonville Technical College received $3,445,553 in state aid on ...
Math algebra - Sarah’s two student loans totaled $12,000. One of her loans ...
Finance - The prince Albert Corporation has forecasted the following sales for ...
Accounting - A process began the month with 3,000 units in the beginning work in...
algebra - A total of $12,000 is invested in two funds paying 9% and 11% simple ...
Math Algebra - Cole’s two student loans totaled $31,000. One of his loans ...
MAth - 1. John’s loans for his business total $155,000. One of the loans is...
Math 81 - How can $60,000 be invested, part at 7% annual simple interest and the...
Mathematics - A loan of $7,000,000 is being amortised over 48 months at an ...
Mathematics - A loan of $7,000,000 is being amortised over 48 months at an ...
For Further Reading
