SOLUTION: Walter Lantz signed a $7,500 note at Bloss Bank. Bloss charges a 6 1/2% discount rate if the loan is for 95 days whats are the proceeds and the effective rate charged

Question 932112: Walter Lantz signed a $7,500 note at Bloss Bank. Bloss charges a 6 1/2% discount rate if the loan is for 95 days whats are the proceeds and the effective rate charged
Answer by stanbon(75887) (Show Source): You can put this solution on YOUR website!
Walter Lantz signed a $7,500 note at Bloss Bank. Bloss charges a 6 1/2% discount rate if the loan is for 95 days whats are the proceeds and the effective rate charged
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Loan Amount:: 7500
Amt you actually receive:: 0.935*7500 = 7012.50
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Amount of discount you paid:: 7500-7012.50 = 487.50
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Amt you would pay on a yearly basis:: 487.50/(95/365) = 1873.03
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Percent of the loan on a yearly basis:: 1873.03/7500 = 24.9%
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Wow!!
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Cheers,
Stan H.
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