A furniture store is offering free credit on purchases of over $1,000. You observe that a big-screen television can be purchased for nothing down and $4,000 due in one year. The store next door offers an identical television for $3,599 but does not offer credit terms. Which statement below best describes the "free" credit?

Select one:

a. The "free" credit effectively costs 4.24 percent

b. The "free" credit costs about 8.34 percent

c. The "free" credit effectively costs zero percent

d. The "free" credit costs about 7.60 percent

e. The "free" credit costs about 11.14 percent