An advertisement for Ford trucks offered 2.9% financing (for 48 months) or $4000 cash back. A truck
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An advertisement for Ford trucks offered "2.9%" financing (for 48 months) or $4000 cash back." A truck buyer financed $40,000 at the low interest rate instead of paying $36,000 cash (after the $4000 rebate). What was the effective rate of interest on the loan if the forgone cash rebate is treated as part of the cost of financing? (The 2.9% interest rate is a monthly compounded nominal rate.)
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The effective interest rate on the 40000 loan is the interest rate on an ...View the full answer
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Related Book For
Fundamentals Of Business Mathematics In Canada
ISBN: 9781259370151
3rd Edition
Authors: F. Ernest Jerome, Jackie Shemko
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