Determine the effective cost of borrowing in dollars

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Reference no: EM131983986

On September 30, 2015, Ericson Company negotiated a two-year, 2,400,000 dudek loan from a foreign bank at an interest rate of 4 percent per year.

It makes interest payments annually on September 30 and will repay the principal on September 30, 2017.

Ericson prepares U.S.-dollar financial statements and has a December 31 year-end.

September 30, 2015	$	0.130
December 31, 2015		0.135
September 30, 2016		0.150
December 31, 2016		0.155
September 30, 2017		0.180

Determine the effective cost of borrowing in dollars in each of the three years 2015, 2016, and 2017. (Do not round intermediate calculations.)

Reference no: EM131983986

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