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thorned

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Active 8 years ago
  • Topics: 3
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  • July 7, 2013 at 8:07 am #133565
    mysterythorned
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    I can’t see an answer to this question but this is also a question I was going to ask?
    Any help greatly appreciated?
    Thanks
    Danielle

    <cite> @LISA83 said:</cite>
    I have a question.. In the lecture relating to chapter 5 example 1 (Early settlement discounts)it more or less states that the cost of early settlement discount is calculated by the following formula: D/100-D multiplied by 365/reduction in payment period(in days).<br />
    <br />
    However, in my text book it gives the formula 1-(100/(100-D) TO THE POWER OF 365/reduction in payment period(in days).<br />
    <br />
    I can see that the fist part of the formula is more or less the same, but why is it in the example in my book it states the formula is to the power of instead of multiplied by 365/reduction in payment period(in days).<br />
    <br />
    Are they refering to the same thing?.. because they both give different answers! I am confused!<br />
    <br />
    Thanks

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