Solitude Company borrowed $60,000 for 3 years with a stated annual rate of 5%. Assuming interest is computed as simple interest, Solitude computed their interest expense to be $3,000 per year in interest, for a total of $9,000 at the end of the loan term. (Click the icon to view Solitude's simple interest computation.) Now assume Solitude Company borrowed $60,000 for 3 years at a 5% interest rate with interest compounded annually Solitude will r the entire amount (principal plus interest) at the end of the 3-year period. Thus, it is not paying any interest until the end of the 3 years much interest will it pay? Compare this amount of interest to the amount computed using the simple interest computation How much interest will it nay? (Round your answer to the nearest whole dollar)
Solitude Company borrowed $60,000 for 3 years with a stated annual rate of 5%. Assuming interest is computed as simple interest, Solitude computed their interest expense to be $3,000 per year in interest, for a total of $9,000 at the end of the loan term. (Click the icon to view Solitude's simple interest computation.) Now assume Solitude Company borrowed $60,000 for 3 years at a 5% interest rate with interest compounded annually Solitude will r the entire amount (principal plus interest) at the end of the 3-year period. Thus, it is not paying any interest until the end of the 3 years much interest will it pay? Compare this amount of interest to the amount computed using the simple interest computation How much interest will it nay? (Round your answer to the nearest whole dollar)
Chapter19: Lease And Intermediate-term Financing
Section: Chapter Questions
Problem 20P
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Question
siMPLE INREST COMPUTATION
$60000*5%*3=9000
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