document.write( "Question 1193569: Please help me with the homework
\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:
\n" ); document.write( "1.1. how much will the client receive?
\n" ); document.write( "1.2. what is the equivalent simple interest of the this loan? \n" ); document.write( "

Algebra.Com's Answer #848570 by ikleyn(52775) $\"\"$ $\"About$

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\n" ); document.write( "Please help me with the homework
\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:
\n" ); document.write( "1.1. how much will the client receive?
\n" ); document.write( "1.2. what is the equivalent simple interest of the this loan?
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\n" ); document.write( "\n" ); document.write( " Calculations in the post by @parmen are incorrect.\r
\n" ); document.write( "\n" ); document.write( " I came to bring a correct solution.\r
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document.write( "**1.1. Calculate the amount the client receives:**\r\n" );
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document.write( "* **Calculate the discount:**\r\n" );
document.write( "    * Discount = Face Value * Discount Rate * Time \r\n" );
document.write( "                = $6000 * 0.16 * (9/12) \r\n" );
document.write( "                = $720\r\n" );
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document.write( "* **Amount received by the client:**\r\n" );
document.write( "    * Amount Received = Face Value - Discount\r\n" );
document.write( "                        = $6000 - $720\r\n" );
document.write( "                        = $5280\r\n" );
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document.write( "**1.2. Calculate the equivalent simple interest rate**\r\n" );
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document.write( "* **Find the effective discount rate:**\r\n" );
document.write( "    * Effective Discount Rate = (Discount / Face Value) * (12 / Time in months) \r\n" );
document.write( "                               = ($720 / $6000) * (12 / 9) \r\n" );
document.write( "                               = 0.16 * 4/3 \r\n" );
document.write( "                               = 0.2133 \r\n" );
document.write( "\r\n" );
document.write( "* **Calculate the equivalent simple interest rate:**\r\n" );
document.write( "    * Equivalent Simple Interest Rate = (Discount / Present Value) * (12 / Time in months)\r\n" );
document.write( "                                  = ($720 / $5280) * (12 / 9) \r\n" );
document.write( "                                  = 0.1818 \r\n" );
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document.write( "* **Express as a percentage:**\r\n" );
document.write( "    * Equivalent Simple Interest Rate = 0.1618 * 100 = 18.18%\r\n" );
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document.write( "**Therefore:**\r\n" );
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document.write( "* **1.1. The client will receive $5280.**\r\n" );
document.write( "* **1.2. The equivalent simple interest rate of the loan is approximately 18.2% per annum.**\r\n" );
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\n" ); document.write( "\n" ); document.write( "Solved (correctly).\r
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