A merchant buys a bill of goods requiring the payment of $1,500 at the end of 180 days. He is offered a 5% discount for cash in 30 days. What is the highest rate at which he could afford to borrow money in order to take advantage of the discount?
A merchant buys a bill of goods requiring the payment of $1,500 at the end of 180 days. He is offered a 5% discount for cash in 30 days. What is the highest rate at which he could afford to borrow money in order to take advantage of the discount?
Chapter5: The Time Value Of Money
Section: Chapter Questions
Problem 15P
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A merchant buys a bill of goods requiring the payment of $1,500 at the end of 180 days.
He is offered a 5% discount for cash in 30 days.
What is the highest rate at which he could afford to borrow money in order to take advantage of the discount?
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