A Furniture Store Is Offering Free Credit on Purchases Over

Multiple Choice

A furniture store is offering free credit on purchases over $1,000.You observe that a big-screen television can be purchased for nothing down and $4,000 due in one year.The store next door offers an identical television for $3,650 but does not offer credit terms.Which statement below best describes the "free" credit?

A) The "free" credit costs about 8.75%.
B) The "free" credit costs about 9.13%.
C) The "free" credit costs about 9.59%.
D) The "free" credit effectively costs zero%.