Interest Rate Guarantee: On July 1, 2021, ABC Corp. agreed with the bank a P5,000,000 loan to be credited to ABC on Sept. 30, 2021, and due on Mar. 31, 2022. They also entered into an agreement of a 9% interest rate guarantee for a P40,000 premium. 1. If the actual interest rate on Sept. 30 is 7%, how much would the ideal effective interest rate on the loan be for ABC? 2. If the actual interest rate on Sept. 30 is 10%, how much would the ideal effective interest rate on the loan be for ABC?
Interest Rate Guarantee: On July 1, 2021, ABC Corp. agreed with the bank a P5,000,000 loan to be credited to ABC on Sept. 30, 2021, and due on Mar. 31, 2022. They also entered into an agreement of a 9% interest rate guarantee for a P40,000 premium. 1. If the actual interest rate on Sept. 30 is 7%, how much would the ideal effective interest rate on the loan be for ABC? 2. If the actual interest rate on Sept. 30 is 10%, how much would the ideal effective interest rate on the loan be for ABC?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Interest Rate Guarantee: On July 1, 2021, ABC Corp. agreed with the bank a P5,000,000 loan to be credited to ABC on Sept. 30, 2021, and due on Mar. 31, 2022. They also entered into an agreement of a 9% interest rate guarantee for a P40,000 premium.
1. If the actual interest rate on Sept. 30 is 7%, how much would the ideal effective interest rate on the loan be for ABC?
2. If the actual interest rate on Sept. 30 is 10%, how much would the ideal effective interest rate on the loan be for ABC?
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