Saturday, August 13, 2011

Simple interest rates in math problems?

Homer won a prize in the lottery of $4,000, payable $2,000 immediately and $2,000 plus 4% simple interest payable in 250 days. Getting impatient, Homer sells the promissory note to Moe for $1,980 cash after 130 days. Using a nominal 360 day year, find the simple interest rate, rounded to .01, earned by Moe

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