What annual interest rate is implied by your answer to exercise 18.1? You calculate this rate by…


What annual profit reprove is involved by your reply to application 18.1? You reckon this reprove by dividing 10,000 by the difference of 10,000 and the equality you are disposed to pay for expedited handling, then preface the result to the twelfth sway and subtracting 1. For illustration, if you were disposed to pay 100, the result would be (10,000/9,900)12 − 1 = 0.1281781, or 12 percent.

application 18.1

You conciliate entertain a 10,000 insurance payment in two months. If you are disposed to pay for expedited handling, you can be remunerated in one month. Would you be disposed to pay 50? 100? 200? More?