A Furniture Store Is Offering Free Credit on Purchases Over

question 54

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 cost of the "free" credit?

• A) 8.75%
• B) 9.13%
• C) 9.59%
• D) 0%

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Definitions:

Ego

In psychoanalytic theory, the part of the personality responsible for dealing with reality, balancing the demands of the id and superego.

Impulsive

Acting without forethought or consideration of the consequences, typically driven by immediate desires or emotions.

Illogical

Lacking sense or clear, sound reasoning.

Emotional

Pertaining to feelings or affective states, often influencing behavior, thought processes, and physical states.