Mike is renovating his house and plan to have a new bedroom furniture. He purchased the furniture e costing RM 12,000 through an installment plan. He has to pay 10% down payment and 18 monthly payment of RM 650 each.

Mike is renovating his house and plan to have a new bedroom furniture. He purchased the furniture e costing RM 12,000 through an installment plan. He has to pay 10% down payment and 18 monthly payment of RM 650 each.

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

ChapterA: Appendix - Time Value Of Cash Flows: Compound Interest Concepts And Applications

Section: Chapter Questions

Problem 12E

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Question

Mike is renovating his house and plan to have a new bedroom furniture. He purchased the
furniture e costing RM 12,000 through an installment plan. He has to pay 10% down
payment and 18 monthly payment of RM 650 each. Using the constant ratio method,
find the

a) flat rate (simple interest rate charged (to 2 dp).

b) approximate actual annual percentage (APR) (to 2 dp).

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