tailieunhanh - Ebook Contemporary business mathematics - For colleges (15th edition): Part 2

(BQ) Part 2 book "Contemporary business mathematics - For colleges" has contents: Simple interest, installment purchases, promissory notes and discounting, compound interest, inventory and turnover, financial statements, international business, international business,.and other contents. | Part Interest Applications 13 Simple Interest 14 Installment Purchases 15 Promissory Notes and Discounting 16 Compound Interest 4 Simple Interest 13 Learning Objectives By studying this chapter and completing all assignments, you will be able to: Learning Objective 1 Compute simple interest with time in years or months. Learning Objective 2 Compute ordinary simple interest, using a 360-day year. Learning Objective 3 Compute exact simple interest, using a 365-day year. Learning Objective 4 Compare ordinary simple interest and exact simple interest. Learning Objective 5 Estimate exact simple interest computations. Learning Objective 6 Compute the Principal, Rate, and Time from the basic interest formula. Chapter 13 Simple Interest 251 Most businesses and individuals buy at least some assets without making full payment at the time of the purchase. The seller gives immediate possession to the buyer but does not require payment until some later date. For example, large retailers such as Macy’s Department Store may receive merchandise for the Christmas season but may not be required to pay the seller until January. The seller, who extends credit to the buyer, may or may not charge for this privilege. The charge is called interest, and it is usually quoted as a percent of the amount of credit extended (the principal). When part of the price is paid at the time of purchase, that part is called a down payment. If the seller charges too much interest or does not extend credit, the buyer might borrow money from a third party, such as a bank. The buyer would then sell the merchandise to repay the bank loan. The amount borrowed is called the principal, and the interest charged is a percent of the principal. The bank will charge interest between the loan date and the repayment date. This period of time is called the interest period or the term of the loan. The promise to repay a loan or pay for merchandise may be oral or written. If it is written, it .