A hardware store retailer owes her parts supplier $372,000.00 due in 105 days. If the payment is 15 days late, there is a 1% penalty charge. The retailer can get a 90-day certificate of deposit (CD) paying 5% or a 120-day CD paying 6.5%. Use 360 days for 1 year.
If the retailer has the $372,000.00 available now, how much interest will he make on each of the CD's.
He will make on the 90-day certificate of deposit.
He will make on the 120-day certificate of deposit.
He will pay penalty if he invests in the 120-day certificate of deposit.
The retailer will make more money if he chooses the option.
If the retailer has the $372,000.00 available now, how much interest will he make on each of the CD's.
He will make on the 90-day certificate of deposit.
He will make on the 120-day certificate of deposit.
He will pay penalty if he invests in the 120-day certificate of deposit.
The retailer will make more money if he chooses the option.