Respuesta :
Answer:
The effective interest rate, rounded to the nearest tenth, is 0.1%.
Step-by-step explanation:
The banker's rule is the simple interest formula.
The simple interest formula is given by:
[tex]E = P*I*t[/tex]
In which E are the earnings, P is the principal(the initial amount of money), I is the interest rate(yearly) and t is the time, in years.
The effective interest rate is given by the following formula:
[tex]E_{IR} = \frac{E}{P}[/tex].
In this problem, we have that:
A man makes a simple discount note for $6,200, at an ordinary bank discount rate of 8.84%, for 40 days. We consider that the year has 360 days. This means that [tex]P = 6200, I = 0.0884, t = \frac{40}{360} = \frac{1}{9}[/tex].
So
[tex]E = 6200*0.0884*\frac{1}{9} = 60.9[/tex]
The effective interest rate is
[tex]E_{IR} = \frac{E}{P} = \frac{60.9}{6200} = 0.0098 = 0.001[/tex]
The effective interest rate, rounded to the nearest tenth, is 0.1%.
