# solving for effective Rate

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Question description

 Tina Mier must pay a \$2,000 furniture bill. A finance company will loan Tina \$2,000 for 8 months at a 9% discount rate. The finance company told Tina that if she wants to receive exactly \$2,000, she must borrow more than \$2,000. The finance company gave Tina the following formula:

 What to ask for  = Amount of cash to be received 1 − (Discount rate × Time of loan)

 a. Calculate Tina’s loan request. (Do not round intermediate calculations. Round your final answer to the nearest cent.)

 Loan request \$

 b. Calculate the effective rate of interest. (Do not round intermediate calculations. Round your final answer to the nearest hundredth percent.)

 Effective rate of interest %

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