A regional furniture company is offering either a discount equal to twice the state sales tax or interest-free financing for 60 months. The state sales tax is 6%. What is the effective annual interest rate for financing versus the discount? Assume you are buying $1000 worth of furniture. How will you decide which option to take?
A regional furniture company is offering either a discount equal to twice the state sales tax or interest-free financing for 60 months. The state sales tax is 6%. What is the effective annual interest rate for financing versus the discount? Assume you are buying $1000 worth of furniture. How will you decide which option to take?
Chapter5: The Time Value Of Money
Section: Chapter Questions
Problem 15P
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A regional furniture company is offering either a discount equal to twice the state sales tax or interest-free financing for 60 months. The state sales tax is 6%. What is the effective annual interest rate for financing versus the discount? Assume you are buying $1000 worth of furniture. How will you decide which option to take?
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