A loan with a nominal value of ($3000) payable after (250)days. The debtor paid the amount before this period, anamount of ($2300) in repayment of the debt. What is the discountrate at which the debt was deducted if the discount wasby the commercial method?3.842.845.848.84Find the present value of the loan if you know that thedifference between the trade discount and the validdiscount is $6, the discount period is 120 days,and the valid interest rate is 5%?22818 $21818 $19818 $O20818 $

The discount rate is the interest rate which is charged to commercial banks and other institution…

A loan with a nominal value of ($3000) payable after (250) days. The debtor paid the amount before this period, an amount of ($2300) in repayment of the debt. What is the discount rate at which the debt was deducted if the discount was by the commercial method? 3.84 O2.84 5.84 8.84

A loan with a nominal value of ($3000) payable after (250) days. The debtor paid the amount before this period, an amount of ($2300) in repayment of the debt. What is the discount rate at which the debt was deducted if the discount was by the commercial method? 3.84 O2.84 5.84 8.84

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter16: Working Capital Policy And Short-term Financing

Section: Chapter Questions

Problem 18P

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Concept explainers

Effective Interest Rate

The term interest rate can be defined as the amount that is charged by the lender as a percentage on the principal amount. Interest rate which is charged annually is known as annual percentage rate.

Question

A loan with a nominal value of ($3000) payable after (250)
days. The debtor paid the amount before this period, an
amount of ($2300) in repayment of the debt. What is the discount
rate at which the debt was deducted if the discount was
by the commercial method?
3.84
2.84
5.84
8.84
Find the present value of the loan if you know that the
difference between the trade discount and the valid
discount is $6, the discount period is 120 days,
and the valid interest rate is 5%?
22818 $
21818 $
19818 $
O20818 $

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