A furniture store is offering free credit on purchases over $1,000.You observe that a big-screen television can be purchased for nothing down and $4,000 due in one year.The store next door offers an identical television for $3,650 but does not offer credit terms.Which statement below best describes the cost of the "free" credit?
A) 8.75%
B) 9.13%
C) 9.59%
D) 0%

Question

Quizplus · Accepted Answer

FV = PV(1 + r)^t$4,000 = $3,650(1 + r)r = 0.0959, or 9.59%

A Furniture Store Is Offering Free Credit on Purchases Over