A Furniture Store Is Offering Free Credit on Purchases of Over

question 47

Multiple Choice

A furniture store is offering free credit on purchases of 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 "free" credit?

• A)The "free" credit costs about 8.75 percent
• B)The "free" credit costs about 9.13 percent
• C)The "free" credit costs about 9.59 percent
• D)The "free" credit effectively costs zero percent

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Definitions:

Aptitude Test

A standardized test designed to measure an individual's potential to succeed in a particular activity or field of study.

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A standardized test designed to evaluate a person's proficiency in a specific area of knowledge or skill.

Intelligence Test

A standardized test designed to measure human intelligence.

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