Q1. On March 24, 2014, Brendan and Madison borrow $18,000 each at a simple interest rate r = Brendan's bank calculates interest using exact interest, while Madison's bank uses the Banker's Rule (ordinary interest). Let X= amount Brendan pays back on September 24, 2014, and Y= amount Madison pays back on September 24, 2014. What is the value of X- Y? 12%.

Q1. On March 24, 2014, Brendan and Madison borrow $18,000 each at a simple interest rate r = Brendan's bank calculates interest using exact interest, while Madison's bank uses the Banker's Rule (ordinary interest). Let X= amount Brendan pays back on September 24, 2014, and Y= amount Madison pays back on September 24, 2014. What is the value of X- Y? 12%.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter16: Working Capital Policy And Short-term Financing

Section: Chapter Questions

Problem 14P

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Joseph borrowed P5,000.00 on November 2,2015 from Arthemus, which is to be paid on May 21,2016 at 6.2% simple interest per year. Find the amount to be repaid. How much will the interest be at the repayment date if the following time factors are used? A. Bankers rule B. Exact simple interest C. Approximate/360 D. Approximate/ 365 Show solution.
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2. Joseph borrowed Php 5,000 on November 2, 2015 from Arthemus, which is to be repaid on May 21, 2016 at 6.2% simple interest per year. Find the amount to be repaid. How much will the interest be at the repayment date if the following time factors are used? a. Bankers Rule b. Exact Simple Interest c. Approximate 360 d. Approximate 365 3. How much should Mark pay to Michele if he borrowed Php 10,000 on June 25, 2015 and if the principal and interest are to be paid on Novermber 18, 2015 at 15% simple interest per year? Use the following time factors. a. Bankers Rule; b. Exact Simple Interest c. approximate 360 d. Approximate 365s 4. At what simple interest rate will a sum of money double itself in 5 years?
How to calculate n?
You now ask the banker why the Da t explains that borrowing money is not free because mon n annual percentage rate. re-activity Frections: Write your answers on a (Bond paper or Yellow Pad) using black ballpen only. AJ Santos is a small business owner that wanted to purchase a new piece of equipment to be used in operations. The new equipment would cost him Php. 150,000, an amount which would require him to obtain external financing from a bank payable in five years. Upon applying for a loan, he notices that the bank is charging an interest of 10%. He now wonders why the bank is charging interest. Page egard to to you. the rate is as harged as a cost of to the costs of the bank with ther of to the Is being
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