Smith has just filed an income tax return and is expecting to recieve, in 60 days, a refund check of 1000.
(a) The tax service that helped Smith fill out his return offers to buy Smith's refund check from him. Their policy is to pay 85% of the face value of the check. What annual simple interest rate is implied?
(b) Smith negotiates with the tax service and sells his refund check for 900. To what annual simple interest rate does this correspond?
(c) Smith decides to deposit the 900 in an account which earns simple interest at an annual rate if 9%. What is the accumulated value of his account on the day he would recieve his tax refund check?
(d) How many days would it take from the time of his intial deposit of 900 for the account to reach 1000?