Suppose a customer is offered a loan at a discount rate of


Question: Suppose a customer is offered a loan at a discount rate of 8 percent and pays $75 in interest at the beginning of the term of the loan. What net amount of credit did this customer receive? Suppose you are told that the effective rate on this loan is 12 per-cent. What is the average loan amount the customer has available during the year?

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Finance Basics: Suppose a customer is offered a loan at a discount rate of
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