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Business Mathematics Brief 12th Edition by Stanley Salzman ,Gary Clendenen, Charles Miller
Edition 12ISBN: 978-0132605540Business Mathematics Brief 12th Edition by Stanley Salzman ,Gary Clendenen, Charles Miller
Edition 12ISBN: 978-0132605540 Exercise 45
Solve the following application problems. Round to the nearest cent.
MAXIMIZING INTEREST Bank of America has $850,000 to lend for 9 months. It can lend it to an automobile dealer at a simple interest rate of 12%, or it can lend it to a small contractor that will pay 12% compounded monthly. How much additional interest would the compound interest loan to the small business generate? Find the effective interest rate for both loans to the nearest hundredth of a percent. __________________
MAXIMIZING INTEREST Bank of America has $850,000 to lend for 9 months. It can lend it to an automobile dealer at a simple interest rate of 12%, or it can lend it to a small contractor that will pay 12% compounded monthly. How much additional interest would the compound interest loan to the small business generate? Find the effective interest rate for both loans to the nearest hundredth of a percent. __________________
Explanation
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Consider the simple interest case.
The ...
Business Mathematics Brief 12th Edition by Stanley Salzman ,Gary Clendenen, Charles Miller
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