Under the effective interest method of interest bearing note in lump-sum payment, the interest to be paid is equal to A. the effective (yield) rate of interest multiplied by the face of the note. B. the effective rate multiplied by the beginning of the period carrying amount of the note. C. the stated rate multiplied by the beginning of the period carrying amount of the note. D. the stated (nominal) rate of interest multiplied by the face of the note.
Under the effective interest method of interest bearing note in lump-sum payment, the interest to be paid is equal to A. the effective (yield) rate of interest multiplied by the face of the note. B. the effective rate multiplied by the beginning of the period carrying amount of the note. C. the stated rate multiplied by the beginning of the period carrying amount of the note. D. the stated (nominal) rate of interest multiplied by the face of the note.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Under the effective interest method of interest bearing note in lump-sum payment, the interest to be paid is equal to
A. the effective (yield) rate of interest multiplied by the face of the note.
B. the effective rate multiplied by the beginning of the period carrying amount of the note.
C. the stated rate multiplied by the beginning of the period carrying amount of the note.
D. the stated (nominal) rate of interest multiplied by the face of the note.
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