A store will give a 2.5% disount on the cost of purchase if you pay cash today. The payment is due in 1 month. What is the implicit borrowing rate for clients that defer their payment for 1 month? The effective annual rate? Discouunt 0.015 Months 12 Quarterly Rate 0.00125 Effective Annual interest rate 19.56% 1+0.015^12-1=wrong. how do I calculate the effective annual rate correctly?
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A store will give a 2.5% disount on the cost of purchase if you pay cash today. The payment is due in 1 month. What is the implicit borrowing rate for clients that defer their payment for 1 month? The effective annual rate?
Discouunt | 0.015 |
Months | 12 |
Quarterly Rate | 0.00125 |
Effective Annual interest rate | 19.56% |
1+0.015^12-1=wrong. how do I calculate the effective annual rate correctly?
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- A store will give you a 1.75% discount on the cost of your purchase if you pay cash today. Otherwise, you will be billed the full price with payment due in 1 month. What is the implicit borrowing rate being paid by customers who choose to defer payment for the month? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal points. Effective Annual Rate: ___%Suppose your Visa credit card charges an APR of 13.5%, compounded monthly and your current statement shows a balance of $758.50.a) If you make no payments and no additional purchases for one year, what will bethe amount owed at the end of that year?b) How much total interest will be paid?c) What is the nominal rate?d) What is the effective annual rate (EAR)?e) Suppose this credit card company requires a minimum monthly payment of $25.Assuming that no additional purchases are made and also assuming that this minimum amount is paid every month, prepare an amortization schedule for the first three months of payments.A store will give you a 4.00% discount on the cost of your purchase if you pay cash today. Otherwise, you will be billed the full price with payment due in 1 month. What is the implicit borrowing rate (effective annual rate) being paid by customers who choose to defer payment for the month?
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