Answered: Mr. Lima borrowed ₱50,000 from a…

Mr. Lima borrowed ₱50,000 from a lending firm to start a mini-store business. If the firm charges simple interest of 5%, how much must Mr. Reyes pay in three years?

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter9: Deductions: Employee And Self-employed-related Expenses

Section: Chapter Questions

Problem 15CE

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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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Mr. Lima borrowed ₱50,000 from a lending firm to start a mini-store business. If the firm charges simple interest of 5%, how much must Mr. Reyes pay in three years?

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