SCB Capital Bank Uses the Discount Method of Calculating Finance

question 21

Short Answer

SCB Capital Bank uses the discount method of calculating finance charges on some loans. For the two loans below, calculate the discount amount that goes to Riverside and the proceeds that go to the borrower. Then, calculate the actual interest rate which is based on the proceeds rather than the face value. Use a 365-day year and compute actual rates to the nearest 1/100 of a percent.
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Definitions:

Nominal Random Variable

A type of random variable that categorizes data without a natural order or ranking among the categories.

Interval Random Variable

This term seems incorrect or unconventional in this context; an "interval variable" is a type of numerical data that’s measured along a scale, and "random variable" pertains to a different statistical concept. NO.

Continuous Random Variable

A variable that can take on an infinite number of values within a given range.

Textbook Cost

Textbook cost refers to the expense associated with purchasing academic books required for coursework or study.