Answered

Connect with a global community of experts on IDNLearn.com. Join our interactive Q&A platform to receive prompt and accurate responses from experienced professionals in various fields.

Jane James owns an appliance store. She normally receives $50,000 worth of appliances per month. She does not like to owe people money and always pays her bills on the day she receives the invoice. Someone told her that if she delayed payment, she could actually increase her profit because the money would be earning interest in her account. She went through her bills and found that she actually had an additional ten days, on average to pay her invoices. She also found that she was earning 5 percent interest on the money she had in her money market savings account. If she delayed payment by ten days, how much additional interest would she earn for the year

Sagot :

Answer:

The correct answer is "$820".

Explanation:

Whenever she delays compensation by 10 days a month (even though she receives monthly invoices), she will indeed earn interest for something like a combined amount of 120 days (10 days x 12 months) again for full year of 365 days.

The interest earned will be:

⇒ [tex]50000\times 5 \ percent\times \frac{120}{365}[/tex]

⇒ [tex]50000\times 0.05\times 0.328[/tex]

⇒ [tex]820[/tex] ($)

Thank you for being part of this discussion. Keep exploring, asking questions, and sharing your insights with the community. Together, we can find the best solutions. Your questions find answers at IDNLearn.com. Thanks for visiting, and come back for more accurate and reliable solutions.