An automotive financier claims to be lending money at simple interest, but when computing the principal, he includes the interest every six months. If he charges a ten percent interest rate, the effective rate of interest is:
A. 10%
B. 10.25%
C. 10.5%
D. None of these
Answer:B
An automotive financier claims to be lending money at simple interest, but when computing the principal, he includes the interest every six months. If he charges a ten percent interest rate, the effective rate of interest is:
A. 10% B. 10.25% C. 10.5% D. None of these