Answered: formula for computing interest on a…

formula for computing interest on a note is: Principal of the notex Annual interest rate x Time expressed in fraction of year

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter17: Accounting For Notes And Interest

Section: Chapter Questions

Problem 2SEA

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Concept explainers

Cost of Credit

The cost of credit is an extra amount that the borrower has to pay besides the loan amount. These credit charges may vary from loan to loan. The cost of credit includes interest charges, maintenance charges, and arrangement charges. Some of the costs are mandatorily collected by the lender based on the loan amount and tenure of the loan. The cost of credit is also called finance charges of the credit.

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The formula for computing interest on a note is: Principal of the notex Annual interest rate x Time expressed in fraction of year. True or False True False

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