POOR CREDIIT Cathy Cox has poor credit but she found a bank that will lend her $4200 when she uses some collateral. Still, the bank charges a 12% discount rate. Find (a) the proceeds if the note is for 10 months and (b) the effective interest rate charged by the bank.

POOR CREDIIT Cathy Cox has poor credit but she found a bank that will lend her $4200 when she uses some collateral. Still, the bank charges a 12% discount rate. Find (a) the proceeds if the note is for 10 months and (b) the effective interest rate charged by the bank.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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21. POOR CREDIT Cathy Cox has poor credit but she found a bank that will lend her $4200
when she uses some collateral. Still, the bank charges a 12% discount rate. Find (a) the
proceeds if the note is for 10 months and (b) the effective interest rate charged by the
bank.

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