Thursday, August 11, 2011

Can anyone help me with a finite math problem?

Homer won a prize in the lottery of $2000, payable $1000 immediately and $1000 plus 4% simple interest payable in 240 days. Getting impatient, Homer sells the promissory note to Moe for $980 cash after 130 days. Using a nominal 360 day year, find the simple interest rate, rounded to .01, earned by Moe.

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