It is the practice of almost all bank in the Philippines that when they grant a loan, the interest for 1 year is automatically deducted from the principal amount upon release of money to a borrower. Let us therefore assume that you applied for a loan with the bank and the P80000 was approved at an interest rate of 14% of which P11200 was deducted and you were given ac check of P68800. Since you have to pay the amount of P80000 one year after, what then will be the effective interest rate?

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A: We have t=18, P=30,000 A= 15249.13

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A:

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A:

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A: * SOLUTION :-

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A: Given Information

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Q: would be due at the end of 18 months for Php 15,000 borrowed at simple interest at a rate of 6% per…

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