document.write( "Question 885995: A cash discount of 2% is given if a bill is paid 20 days in advance of its due date. At what interest rate could you afford to borrow money to take advantage of this discount? \n" ); document.write( "

Algebra.Com's Answer #535609 by Theo(13342) $\"\"$ $\"About$

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if you pay the bill 20 days in advance of the due date, you pay 100.
\n" ); document.write( "if you pay the bill less than 20 days before the due date, you pay 102.
\n" ); document.write( "let's say you borrow money at 1% so you can pay the bill 20 days before the due date.
\n" ); document.write( "you take that 100 and pay the bill early.
\n" ); document.write( "when the payment on the loan is due, you pay back 100 + 1 dollar for a total cost of 101.
\n" ); document.write( "you saved 1 dollar.
\n" ); document.write( "you will save money as long as the interest rate on the loan is less than the interest rate on the bill that is due.\r
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