Answered: ohn loaned from Karl the sum of P5,500…

ohn loaned from Karl the sum of P5,500 and promised to pay the sum plus interest at the end of 9months. If money is worth 12%, how much money will John pay Karl at the end of the term?

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter4: Time Value Of Money

Section: Chapter Questions

Problem 13PROB

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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.

Question

7. John loaned from Karl the sum of P5,500 and promised to pay the sum plus interest at the end of 9months. If money is worth 12%, how much money will John pay Karl at the end of the term?

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