document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=1193569>Question 1193569</A>: <I><SPAN STYLE=\"word-break: break-all;\"> Please help me with the homework<BR>\n" );
document.write( "The simple discount rate of a bank is 16% per annum. If a client signs a note to pay 6000 in nine months time:<BR>\n" );
document.write( "1.1. how much will the client receive?<BR>\n" );
document.write( "1.2. what is the equivalent simple interest of the this loan? </SPAN>\n" );
document.write( "</I><HR><TABLE width=100%><TR><TD><B><A HREF=http://www.algebra.com/>Algebra.Com's</A> Answer #848561 by </B><A HREF=/tutors/aboutme.mpl?userid=parmen><B>parmen(42)</B></A><img src=\"/images/stars/stars-07.gif\" alt=\"\" >&nbsp;<A HREF=/tutors/aboutme.mpl?userid=parmen><IMG SRC=http://www.algebra.com/images/aboutme-small.gif BORDER=0 alt=\"About Me\" VALIGN=MIDDLE></A>&nbsp;<IMG SRC=http://www.algebra.com/images/nopicture.jpg><BR>You can <A HREF=\"/cgi-bin/embed-solution.mpl?show=1&solution=848561\">put this solution on YOUR website!</A><BR><SPAN STYLE=\"word-break: break-all;\"> **1.1. Calculate the amount the client receives:**\r<BR>\n" );
document.write( "\n" );
document.write( "* **Calculate the discount:**<BR>\n" );
document.write( "    * Discount = Face Value * Discount Rate * Time <BR>\n" );
document.write( "                = $6000 * 0.16 * (9/12) <BR>\n" );
document.write( "                = $72\r<BR>\n" );
document.write( "\n" );
document.write( "* **Amount received by the client:**<BR>\n" );
document.write( "    * Amount Received = Face Value - Discount<BR>\n" );
document.write( "                        = $6000 - $72<BR>\n" );
document.write( "                        = $5928\r<BR>\n" );
document.write( "\n" );
document.write( "**1.2. Calculate the equivalent simple interest rate**\r<BR>\n" );
document.write( "\n" );
document.write( "* **Find the effective discount rate:**<BR>\n" );
document.write( "    * Effective Discount Rate = (Discount / Face Value) * (12 / Time in months) <BR>\n" );
document.write( "                               = ($72 / $6000) * (12 / 9) <BR>\n" );
document.write( "                               = 0.016 * 4/3 <BR>\n" );
document.write( "                               = 0.02133 \r<BR>\n" );
document.write( "\n" );
document.write( "* **Calculate the equivalent simple interest rate:**<BR>\n" );
document.write( "    * Equivalent Simple Interest Rate = (Discount / Present Value) * (12 / Time in months)<BR>\n" );
document.write( "                                  = ($72 / $5928) * (12 / 9) <BR>\n" );
document.write( "                                  = 0.01618 \r<BR>\n" );
document.write( "\n" );
document.write( "* **Express as a percentage:**<BR>\n" );
document.write( "    * Equivalent Simple Interest Rate = 0.01618 * 100 = 1.618%\r<BR>\n" );
document.write( "\n" );
document.write( "**Therefore:**\r<BR>\n" );
document.write( "\n" );
document.write( "* **1.1. The client will receive $5928.**<BR>\n" );
document.write( "* **1.2. The equivalent simple interest rate of the loan is approximately 1.62% per annum.**<BR>\n" );
document.write( " </SPAN>\n" );
document.write( "</TD></TR></TABLE>\n" );