Answered: YVONE trading borrowed Php 200,000 from…

YVONE trading borrowed Php 200,000 from BLP Rural Bank at 9% discounted rate for one year and six months. Required: Determine the effective interest rate of the discount.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 1PB: Sub-Cinema Inc. borrowed $10,000 on Jan. 1 and will repay the loan with 12 equal payments made at...

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Concept explainers

Effective Interest Rate

The term interest rate can be defined as the amount that is charged by the lender as a percentage on the principal amount. Interest rate which is charged annually is known as annual percentage rate.

Question

Topic: Short Term Financing Directions: Solve the following (please refer to the picture)

3. YVONE trading borrowed Php 200,000 from BLP Rural Bank at 9% discounted rate for one year and
six months.
Required: Determine the effective interest rate of the discount.

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