On January 1, 20x1, Next Co. obtains a P4,000,000 bank loan due on December 31, 20x4. Interest of 12% is due annually. The bank charges Next Co. an 11.19% nonrefundable loan origination fee. The effective interest rate on the loan is approximately equal to a. 11.19% b. 12% c . 16 % d. 17.37%

On January 1, 20x1, Next Co. obtains a P4,000,000 bank loan due on December 31, 20x4. Interest of 12% is due annually. The bank charges Next Co. an 11.19% nonrefundable loan origination fee. The effective interest rate on the loan is approximately equal to a. 11.19% b. 12% c . 16 % d. 17.37%

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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a. 11.19%

b. 12% c

. 16 %

d. 17.37%

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