Answered: Which option is more suitable according…

Business

Accounting

Which option is more suitable according to the interest rate applied for the debt.

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

Please solve

We need to borrow 10000 ECU of money. There are different options for paying.
a. to pay 2938 ECU at the end of each year for a period of five years
b. To pay 237.90 ECU at the end of each month for five years
Which option is more suitable according to the interest rate applied for the debt.

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