The Titan Siren Company is due to receive a payment of $475,000 in 27 days. A finance company offers to buy this payment today, using a simple discount rate of 10%. What simple interest rate would this be equivalent to?
Am I missing something here?
This is what I did:
D = Md
D=(475,000)(.10)
D = $47,500
The value of the payment would be $427,500.00
But wouldn't the simple interest be the same 10% because it is the same day? Or do I still need to run it through I=PRT ?
Thank you.
Am I missing something here?
This is what I did:
D = Md
D=(475,000)(.10)
D = $47,500
The value of the payment would be $427,500.00
But wouldn't the simple interest be the same 10% because it is the same day? Or do I still need to run it through I=PRT ?
Thank you.