To find the flat interest rate being charged on the loan, we need to calculate the total amount paid in installments and then calculate the interest charged.
The total amount paid in installments is:
$50 * 8 months = $400
The interest charged is:
Total amount paid - Price of the TV screen = $400 - $500 = -$100
Since the interest charged is negative, it means that the customer is actually receiving a $100 discount on the TV screen by paying in installments. Therefore, the flat interest rate being charged on the loan is 0%.
if the price of the TV screen is $500 and the firm advertise the TV screen at $50 quarterly payments for eight months. what is the flat interest rate been charged on the loan?
1 answer
1 answer