25 An electronics retaller charges customers an anniual interest rate of
[6m] a) convert to a decimal. Divide this number
by the number of days in 1 year to determine the
dally interest rate charged. Round your answer to
5 decimal places.
b) Calculate the interest charged in 1 day. on an unpaid
balance of .
c) Compare this amount to the interest earned in. 1 year
in 1 of your researched savings accounts.

Ask by Wade Tran. in Canada

Jan 24,2025

Question

25 An electronics retaller charges customers an anniual interest rate of
[6m] a) convert to a decimal. Divide this number
by the number of days in 1 year to determine the
dally interest rate charged. Round your answer to
5 decimal places.
b) Calculate the interest charged in 1 day. on an unpaid
balance of .
c) Compare this amount to the interest earned in. 1 year
in 1 of your researched savings accounts.

Ask by Wade Tran. in Canada

Jan 24,2025

UpStudy AI · Accepted Answer

Let's solve the problem step by step.

### Part a: Convert $$ 31.4\% $$ to a decimal and find the daily interest rate

1. **Convert $$ 31.4\% $$ to a decimal:**
   $$
   \text{Decimal} = \frac{31.4}{100} = 0.314
   $$

2. **Calculate the daily interest rate:**
   - There are $$ 365 $$ days in a year.
   $$
   \text{Daily Interest Rate} = \frac{0.314}{365}
   $$

Now, let's calculate the daily interest rate and round it to 5 decimal places.

### Part b: Calculate the interest charged in 1 day on an unpaid balance of $$ \$7000 $$

1. **Use the daily interest rate to find the interest charged in 1 day:**
   $$
   \text{Interest Charged in 1 Day} = \text{Daily Interest Rate} \times 7000
   $$

### Part c: Compare this amount to the interest earned in 1 year in a researched savings account

For this part, I will need to assume a typical savings account interest rate. Let's say the average savings account interest rate is $$ 1.5\% $$ annually.

1. **Convert $$ 1.5\% $$ to a decimal:**
   $$
   \text{Savings Account Decimal} = \frac{1.5}{100} = 0.015
   $$

2. **Calculate the interest earned in 1 year on $$ \$7000 $$:**
   $$
   \text{Interest Earned in 1 Year} = 7000 \times 0.015
   $$

Now, let's perform the calculations for parts a and b.
Calculate the value by following steps:
- step0: Calculate:
  $$7000\times 0.015$$
- step1: Multiply the numbers:
  $$105$$
Calculate or simplify the expression $$ 0.314/365 $$.
Calculate the value by following steps:
- step0: Calculate:
  $$\frac{0.314}{365}$$
- step1: Convert the expressions:
  $$\frac{\frac{157}{500}}{365}$$
- step2: Multiply by the reciprocal:
  $$\frac{157}{500}\times \frac{1}{365}$$
- step3: Multiply the fractions:
  $$\frac{157}{500\times 365}$$
- step4: Multiply:
  $$\frac{157}{182500}$$
Calculate or simplify the expression $$ (0.314/365)*7000 $$.
Calculate the value by following steps:
- step0: Calculate:
  $$\left(\frac{0.314}{365}\right)\times 7000$$
- step1: Divide the terms:
  $$\frac{157}{182500}\times 7000$$
- step2: Reduce the numbers:
  $$\frac{157}{365}\times 14$$
- step3: Multiply:
  $$\frac{157\times 14}{365}$$
- step4: Multiply:
  $$\frac{2198}{365}$$
### Part a: Daily Interest Rate Calculation

1. **Daily Interest Rate:**
   $$
   \text{Daily Interest Rate} \approx 0.00086
   $$
   (rounded to 5 decimal places: $$ 0.00086 $$)

### Part b: Interest Charged in 1 Day

1. **Interest Charged in 1 Day:**
   $$
   \text{Interest Charged in 1 Day} \approx 6.02192
   $$

### Part c: Interest Earned in 1 Year in a Savings Account

1. **Interest Earned in 1 Year:**
   $$
   \text{Interest Earned in 1 Year} = 105
   $$

### Summary of Results

- **Daily Interest Rate:** $$ 0.00086 $$
- **Interest Charged in 1 Day on $$ \$7000 $$:** $$ \approx 6.02 $$
- **Interest Earned in 1 Year on $$ \$7000 $$ in a Savings Account:** $$ 105 $$

### Comparison

- The interest charged in 1 day on an unpaid balance of $$ \$7000 $$ is approximately $$ 6.02 $$.
- The interest earned in 1 year in a typical savings account is $$ 105 $$.

This shows that the interest charged by the electronics retailer is significantly higher than the interest earned in a savings account over the same period.
- **Daily Interest Rate:** 0.00086 - **Interest Charged in 1 Day on \$7000:** \$6.02 - **Interest Earned in 1 Year in a Savings Account:** \$105 The retailer's daily interest is much higher than the interest earned in a typical savings account.

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