During its January sale, Furniture City is offering terms of 25% down with no further payments and no interest charges for 6 months when the balance is due. Furniture City sells the conditional sale contracts from these credit sales to a finance company. The finance company discounts the contracts to yield 18% compounded monthly. What cash amount should Furniture City accept on a $1,595 item in order to end up in the same financial position as if the item were sold under the terms of the January sale?

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The Answer of During its January sale, Furniture City is offering terms of 25% down with no further payments and no interest charges for 6 months when the balance is due. Furniture City sells the conditional sale contracts from these credit sales to a finance company. The finance company discounts the contracts to yield 18% compounded monthly. What cash amount should Furniture City accept on a $1,595 item in order to end up in the same financial position as if the item were sold under the terms of the January sale?

During Its January Sale, Furniture City Is Offering Terms of 25