Question 1193569
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Please help me with the homework
The simple discount rate of a bank is 16% per annum. If a client signs a note to pay 6000 in nine months time:
1.1. how much will the client receive?
1.2. what is the equivalent simple interest of the this loan?
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        Calculations in the post by @parmen are incorrect.

        I came to bring a correct solution.



<pre>
**1.1. Calculate the amount the client receives:**

* **Calculate the discount:**
    * Discount = Face Value * Discount Rate * Time 
                = $6000 * 0.16 * (9/12) 
                = $720

* **Amount received by the client:**
    * Amount Received = Face Value - Discount
                        = $6000 - $720
                        = $5280

**1.2. Calculate the equivalent simple interest rate**

* **Find the effective discount rate:**
    * Effective Discount Rate = (Discount / Face Value) * (12 / Time in months) 
                               = ($720 / $6000) * (12 / 9) 
                               = 0.16 * 4/3 
                               = 0.2133 

* **Calculate the equivalent simple interest rate:**
    * Equivalent Simple Interest Rate = (Discount / Present Value) * (12 / Time in months)
                                  = ($720 / $5280) * (12 / 9) 
                                  = 0.1818 

* **Express as a percentage:**
    * Equivalent Simple Interest Rate = 0.1618 * 100 = 18.18%

**Therefore:**

* **1.1. The client will receive $5280.**
* **1.2. The equivalent simple interest rate of the loan is approximately 18.2% per annum.**
</pre>

Solved (correctly).