Calculate the effective annual rate on each of the following loans: 1. $5,000 loan for 2 years, 10%simple annual interest with principal repayment at the end of the second year. 2. $5,000 loan for 2 years, 10% add on interest, paid in 24 equal monthly installments. 3. $5,000 loan to be repaid at the end of two years, 10%discount rate
Calculate the effective annual rate on each of the following loans: 1. $5,000 loan for 2 years, 10%simple annual interest with principal repayment at the end of the second year. 2. $5,000 loan for 2 years, 10% add on interest, paid in 24 equal monthly installments. 3. $5,000 loan to be repaid at the end of two years, 10%discount rate
Financial Accounting Intro Concepts Meth/Uses
14th Edition
ISBN:9781285595047
Author:Weil
Publisher:Weil
ChapterA: Appendix - Time Value Of Cash Flows: Compound Interest Concepts And Applications
Section: Chapter Questions
Problem 25E
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Calculate the effective annual rate on each of the following loans:
1. $5,000 loan for 2 years, 10%simple annual interest with principal repayment at the end of the second year.
2. $5,000 loan for 2 years, 10% add on interest, paid in 24 equal monthly installments.
3. $5,000 loan to be repaid at the end of two years, 10%discount rate
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