It is the practice of almost all banks in the Philippines that when they grant a loan, the interest for one year is automatically deducted from the principal amount upon release of money to a borrower. Let us therefore assume that you applied for a loan with a bank and the P80,000 was approved at an interest rate of 14% of which P11,200 was deducted and you were given a check of P68,800. Since you have to pay the amount of P80,000 one year after, what then will be the effective interest rate? A. 16.02% B. 16.28 % C. 16.32 % D. 16.47 % What is the ordinary interest on P1,500.50 for 182 days at 5.2%? A. P39.01 B. P39.82 C. P39.45 D. P39.99

It is the practice of almost all banks in the Philippines that when they grant a loan, the interest for one year is automatically deducted from the principal amount upon release of money to a borrower. Let us therefore assume that you applied for a loan with a bank and the P80,000 was approved at an interest rate of 14% of which P11,200 was deducted and you were given a check of P68,800. Since you have to pay the amount of P80,000 one year after, what then will be the effective interest rate? A. 16.02% B. 16.28 % C. 16.32 % D. 16.47 % What is the ordinary interest on P1,500.50 for 182 days at 5.2%? A. P39.01 B. P39.82 C. P39.45 D. P39.99

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

It is the practice of almost all banks in the Philippines that when
they grant a loan, the interest for one year is automatically deducted
from the principal amount upon release of money to a borrower. Let
us therefore assume that you applied for a loan with a bank and the
P80,000 was approved at an interest rate of 14% of which P11,200
was deducted and you were given a check of P68,800. Since you
have to pay the amount of P80,000 one year after, what then will be
the effective interest rate?
A. 16.02 %
B. 16.28 %
C. 16.32 %
D. 16.47 %
What is the ordinary interest on P1,500.50 for 182 days at 5.2%?
A. P39.01
B. P39.82
C. P39.45
D. P39.99

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