On an average day, Town Center Hardware receives $2,420 in checks from customers. These checks clear the bank in an average of 2.1 days. The applicable daily interest rate is .025 percent. What is the maximum amount this store should pay to completely eliminate its collection float? Assume each month has 30 days

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On an average day, Town Center Hardware receives $2,420 in checks from customers. These checks clear the bank in an average of 2.1 days. The applicable daily interest rate is .025 percent. What is the maximum amount this store should pay to completely eliminate its collection float? Assume each month has 30 days

Darshita Changed status to publish August 13, 2020
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Answer:

maximum amount this store should pay to completely eliminate its collection float= $5,082.00

Working

Max Daily Fee

=(2420 x 2.1) x .025

= 127.05
(5,082)

 

Darshita Changed status to publish August 13, 2020

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