Solution-Calculate the amount of the interest expense

Calculate the amount of the interest expense

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Reference no: EM132471938

A borrower has two alternatives for a loan:

(1) issue a $360,000, 60-day, 5% note or

(2) issue a $360,000, 60-day note that creditor discounts at 5%.

Question A. Calculate the amount of the interest expense for each option

Question B. Determine the proceeds received by the borrower in each situation

Question C. Which alternative is more favorable to the borrower? Explain.

Reference no: EM132471938

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Calculate the amount of the interest expense

Reference no: EM132471938

Reference no: EM132471938

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