Ackerman Company enters into an IRG arrangement with Westbank for a 9 months, $800,000 loan starting 3 months from now. The IRG rate is at 11% and the bank quotes a premium of $4,000. REQUIRED: Compute for the effective interest rate if the actual interest rate 3 months from now is 8%.
Ackerman Company enters into an IRG arrangement with Westbank for a 9 months, $800,000 loan starting 3 months from now. The IRG rate is at 11% and the bank quotes a premium of $4,000. REQUIRED: Compute for the effective interest rate if the actual interest rate 3 months from now is 8%.
Chapter5: The Time Value Of Money
Section: Chapter Questions
Problem 9P
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Ackerman Company enters into an IRG arrangement with Westbank for a 9 months, $800,000 loan starting 3 months from now. The IRG rate is at 11% and the bank quotes a premium of $4,000.
REQUIRED:
Compute for the effective interest rate if the actual interest rate 3 months from now is 8%.
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