merchant receives an invoice for $8000 with terms 2/10, n/50. a) What is the maximum interest rate that the merchant could borrow money at to take advantage of the discount? b) If the bank offers a loan for 15% interest, should he accept it, and if so, what will be his savings?

Personal Finance
13th Edition
ISBN:9781337669214
Author:GARMAN
Publisher:GARMAN
Chapter7: Credit Cards And Consumer Loans
Section: Chapter Questions
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merchant receives an invoice for $8000 with terms 2/10, n/50.
a) What is the maximum interest rate that the merchant could borrow money at to take advantage of the discount?
b) If the bank offers a loan for 15% interest, should he accept it, and if so, what will be his savings?   

 

 

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