Problemas a jewelry store manager you want to offer credit, Ask an Expert

Accounting

Problem:

As a jewelry store manager, you want to offer credit, with interest on outstanding balances paid monthly. To carry receivables, you must borrow funds from your bank at a nominal 6%, monthly compounding. To offset your overhead, you want to charge your customers an EAR (or EFF%) that is 1% more than the bank is charging you.

Required:

Question: What APR rate should you charge your customers?

Note: Elucidate all calculation and formulas.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91172719

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