A short-term loan of £5,000 is repayable in 25 days at a simple rate of interest of 6% p.a. Assuming that 1 year is equivalent to exactly 365 days, calculate the following: (i) The amount of interest, to the nearest £0.01, accrued on the loan in 25 days; (ii) (iii) The annual effective rate of discount equivalent to this transaction, to the nearest 0.01%; The annual nominal rate of discount convertible monthly equivalent to this transaction, to the nearest 0.01%.

A short-term loan of £5,000 is repayable in 25 days at a simple rate of interest of 6% p.a. Assuming that 1 year is equivalent to exactly 365 days, calculate the following: (i) The amount of interest, to the nearest £0.01, accrued on the loan in 25 days; (ii) (iii) The annual effective rate of discount equivalent to this transaction, to the nearest 0.01%; The annual nominal rate of discount convertible monthly equivalent to this transaction, to the nearest 0.01%.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter19: Lease And Intermediate-term Financing

Section: Chapter Questions

Problem 18P

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