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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 124
As a borrower, would you prefer a simple interest note with a rate of 11% or a simple discount note at a rate of 11%? Explain using an example. (See Example.)
Comparing Discount Notes and Simple Interest Notes
Jane Benson of Benson Automotive has been offered loans from two different banks. Each note has a face value of $75,000 and a time of 90 days. One note has a simple interest rate of 10%, and the other a simple discount rate of 10%. Benson wants to know which is the better deal.
Quick TIP
This example shows that a simple discount rate of 10% is not equivalent to a simple interest rate of 10%.
SOLUTION
Find the interest owed on each.
Comparing Discount Notes and Simple Interest Notes
Jane Benson of Benson Automotive has been offered loans from two different banks. Each note has a face value of $75,000 and a time of 90 days. One note has a simple interest rate of 10%, and the other a simple discount rate of 10%. Benson wants to know which is the better deal.
Quick TIP
This example shows that a simple discount rate of 10% is not equivalent to a simple interest rate of 10%.
SOLUTION
Find the interest owed on each.
Explanation
Verified
Verified
Suppose that a simple interest note is 
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Business Mathematics Brief 12th Edition by Stanley Salzman ,Gary Clendenen, Charles Miller
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