On December 31, 2021, London Bank granted P5,000,000 loan to a borrower with 10% atated rate payable annually ind maturing in 5 years. The loan was discounted at the market interest rate of 12%. Unfortunately, the financial condition of the borrower worsened because of lower revenue. I. On December 31, 2023, the bank determined that the borrower would pay back only P3,000,000 of the principal at maturity. However, it was considered likely that interest would continue to be paid on the P5,000,000 loan. The present value of 1 at 12% is .67 for five periods and ,71 for three periods. The present value of an ordinary annuity of 1 at 12% is 3.60 for five periods and 2.40 for three periode. 1. What is the amount of cash paid to the borrower on December 31, 2021? & 4,400,000 b. 4,500,000 c. 5,000,000 d. 4,650,000
On December 31, 2021, London Bank granted P5,000,000 loan to a borrower with 10% atated rate payable annually ind maturing in 5 years. The loan was discounted at the market interest rate of 12%. Unfortunately, the financial condition of the borrower worsened because of lower revenue. I. On December 31, 2023, the bank determined that the borrower would pay back only P3,000,000 of the principal at maturity. However, it was considered likely that interest would continue to be paid on the P5,000,000 loan. The present value of 1 at 12% is .67 for five periods and ,71 for three periods. The present value of an ordinary annuity of 1 at 12% is 3.60 for five periods and 2.40 for three periode. 1. What is the amount of cash paid to the borrower on December 31, 2021? & 4,400,000 b. 4,500,000 c. 5,000,000 d. 4,650,000
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter22: Providing And Obtaining Credit
Section: Chapter Questions
Problem 4P: Gifts Galore Inc. borrowed 1.5 million from National City Bank. The loan was made at a simple annual...
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