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What is the net effect of the loan on welcome profit

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Question - On Jan. 1, 20x1, Welcome Bank extended a 4 year, P500,000, zero interest loan to a client. The borrower received loan proceeds of P500,000 and that amount is due in lump sum at maturity. The prevailing interest rate for this type of loan is 12%. What is the net effect of the loan on Welcome's profit in 20x1?

a. (182,240)

b. (144,109)

c. 38,131

d. 0

Reference no: EM133042183

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