A Furniture Store Is Offering Free Credit on Purchases Over

question 112

Multiple Choice

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 "free" credit?

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

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Definitions:

Threat

A declaration or suggestion of intent to cause damage, pain, or harm as a means of achieving a particular outcome or coercing actions from another party.

Union Membership

Affiliation with a labor union that represents workers in negotiations with employers over pay, benefits, and working conditions.

Public Sector

The portion of the economy composed of government services and state-owned enterprises, in contrast to the private sector.

Dramatic Decline

Represents a swift and significant decrease or deterioration in the condition, value, or performance of something.