21. Financial Accounting i. Maxpein borrowed £1000 and agreed to repay the money plus 8% interest in 6 months. Two months after the money was borrowed, the creditor agreed to settle the debt by discounting it at the same simple interest. a) How much did the creditor receive when he discounted the debt? b) Discount the amount paid in a) at the date when the man initially borrowed the money and explain why it is different from the initial amount of £1000. ii. Do again the (i) using a compound interest rate and explain why the amount discounted through the two ways are equals.

21. Financial Accounting i. Maxpein borrowed £1000 and agreed to repay the money plus 8% interest in 6 months. Two months after the money was borrowed, the creditor agreed to settle the debt by discounting it at the same simple interest. a) How much did the creditor receive when he discounted the debt? b) Discount the amount paid in a) at the date when the man initially borrowed the money and explain why it is different from the initial amount of £1000. ii. Do again the (i) using a compound interest rate and explain why the amount discounted through the two ways are equals.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

a man borrowed P2000.000 from a bank and promised to pay the amount for 1 year. He received only the amount of P1920 after the bank, collected an advance interest of P80.00. Determine: interest rate rate of discount difference between A&B
Ms. Kim borrowed an amount from a bank but she only recieved from the bank P1,340. She promised to pay the principal at the end of 9 months. If the corresponding discount rate or often referred toas the banker's discount is 13.73%, what is the amount borrowed?
3. Mr. Bacani borrowed money from the bank. He received from the bank P1,842 and promised to repay P2,000 at the end of 10 months. Determine the rate of simple interest.
1. Terry Bergolt's bank granted him a single-payment loan of $4,400 at an interest rate of 6% exact interest. The term of the loan is 72 days. 1a. What is the exact interest? 1b) What is the maturity value of the loan? 2. Jane Dimas obtained a single-payment loan of $420 to pay a repair bill. She agreed to repay the loan in 90 days at an interest rate of 6.25% ordinary interest 2a. What is the ordinary interest? 2b. What is the maturity value of the loan?
Juan dela Cruz borrowed money from a bank. He received P1, 340 and promised to pay P1, 500 at the end of 9 months. Determine the following:The rate of simple interest.The corresponding discount rate.
Bruno received a one-year, P 375,000 note bearing annual interest of 8% from a customer. After holding the notes for six months, Bruno discounted the note at Special Bank at an effective interest rate of 10%. QUESTION: If the discounting is treated as a borrowing, what amount of loss on discounting should Bruno recognize? Group of answer choices NONE P 20,250 P 5,250 P 9,750
a man borrows money from the bank but only received 86% of the amount requested. he signs a promissory note that he would pay P55,980 at the end of 7 years. how much money is requested from the bank if the simple interest rate is 9.766% a. 36,857.114 b. 38,662.539 c. 33,249.783 d. 30, 365.448
Mr. Dalisay applied for a bank loan with a principal of P150,000 to be paid after five years in order to purchase a vehicle. He negotiated for the stated rate of the loan at 6% wherein the current market rate is 10%. How much proceeds will Mr. Dalisay receive from the bank
Nick borrowed $6000 for 24 months from his bank using an 11 and a 1/2 percent discount note. A. How much interest did Nick pay the bank for the use of the money? B. How much did he receive from the bank?
10
am. 111.
Engr. De Robles borrowed Php 10,000 from a bank and promised to pay the amount for 1 year. But he received Php 9,600 only after the bank deducted an advance interest of Php 400. Find a) the rate of discount and b) the rate of interest that the bank charged him.