As a jewelry store manager, you wantto offer credit, with interest on outstanding balances paid monthly. To carry receivables,you must borrow funds from your bank at a nominal 9%, monthly compounding. To offsetyour overhead, you want to charge your customers an EAR (or EFF%) that is 3% more thanthe bank is charging you. What APR rate should you charge your customers?
As a jewelry store manager, you wantto offer credit, with interest on outstanding balances paid monthly. To carry receivables,you must borrow funds from your bank at a nominal 9%, monthly compounding. To offsetyour overhead, you want to charge your customers an EAR (or EFF%) that is 3% more thanthe bank is charging you. What APR rate should you charge your customers?
Chapter4: Time Value Of Money
Section: Chapter Questions
Problem 32P
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As a jewelry store manager, you want
to offer credit, with interest on outstanding balances paid monthly. To carry receivables,
you must borrow funds from your bank at a nominal 9%, monthly compounding. To offset
your overhead, you want to charge your customers an EAR (or EFF%) that is 3% more than
the bank is charging you. What APR rate should you charge your customers?
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