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14. Janie Christopher lent $6000 to a friend for 90 days at 12%. After 30 days, she sold the note to a third party for $6000. What annual simple interest rate did the third party receive? Use 360 days in a year

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Using the simple interest relation, the annual simple interest rate received by the third party is 11%

The interest rate = 12%

The daily interest rate on the fee can be calculated thus :

  • Number of days, n = 360

  • Daily interest rate = 12% / 360 = 0.0333%

Of the initial 90 days, 30!days has elapsed, hence, the annual simple interest rate recuved by the third party would be :

(0.0333% × (360 - 30)) = 11%

Hence, the annual simple interest rate received by the third party is 11%.

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