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27 December, 20:36

Jay discounts a 100-day note for 25000 at 13%. The effective rate of interest to the nearest hundredth percent is?

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  1. 27 December, 23:06
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    I assume that there are 360 days in a year.

    Simple discount

    25,000*0.13 * (100:360) = 902.78

    Cash in hand at the beginning of 100 days is

    25,000-902.78=24,097.22

    Effective rate of interest is

    902. 78=24097.22*r * (100:360)

    Solve for r

    r=902.78: (24,097.22 * (100:360))

    r=0.1349*100

    r=13.49% ... answer
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