If an Invoice Indicates That Interest at the Rate of 1.2

question 249

Short Answer

If an invoice indicates that interest at the rate of 1.2% per month will be charged on overdue amounts, what effective rate of interest will be charged?

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Definitions:

Utility

Refers to the total satisfaction received from consuming a good or service.

Consuming

The act of using goods and services to satisfy needs or wants.

Maximizing Utility

The process of choosing the most satisfying option among available choices based on preferences and constraints.

Marginal Utility

The augmented utility or contentment a person obtains by consuming an extra unit of a good or service.