# solving for effective Rate

**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. |

Loan request | $ |

b. | Calculate the effective rate of interest. |

Effective rate of interest | % |

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