What is true effective annual interest rate being charged

Assignment Help Accounting Basics
Reference no: EM132575850

Question - A small company needs to borrow Php 160,000. The local (and only) banker makes this statement: "We can loan you Php 160,000 at a very favorable rate of 12% per year for a five-year loan. However, to secure this loan you must agree to establish a checking account (with no interest) in which the minimum average balance is Php 32,000. In addition, your interest payments are due at the end of each year and the principal will be repaid in a lump-sum amount at the end of year five". What is the true effective annual interest rate being charged?

Reference no: EM132575850

Questions Cloud

What dominic should record a capitalized leased asset of : Which approximates the expected fair value of the machine on the option exercise date. On May 1, 2015, Dominic should record a capitalized leased asset of
Quarterly financial plan and budget for retail warehouse : Budgeting is a critical operational component of a manager's duties. The implication of proper budgeting is that it allows companies to effectively plan
What is meant by the term unearned revenue : What is meant by the term unearned revenue? Where should an unearned revenue account appear in the financial statements
Compute the value of the synergy as estimated by the analyst : Compute the value of the synergy as estimated by the analyst. Does the estimate of synergies in justify the premium that company A offered to company B?
What is true effective annual interest rate being charged : A small company needs to borrow Php 160,000. The local (and only) banker makes this statement: What is true effective annual interest rate being charged
Find what amount should lazarus include in current liability : Find What amount should Lazarus include in current liabilities for this finance lease in its December 31, 2015, statement of financial position?
How much is the depreciation expense for the year ended dec : Assuming that Simon uses straight -line method of depreciation, how much is the depreciation expense for the year ended December 31, 2017?
Describe their essential inventory characteristics : Determine the types of inventories these companies currently manage and describe their essential inventory characteristics.
What is amount of liability relating to the lease agreement : What is the amount of liability relating to the lease agreement that Extreme would report in its December 31, 2015 statement of financial position?

Reviews

Write a Review

Accounting Basics Questions & Answers

  Describing valuation issues

You believe that the market has changed so much that valuation of the underlying asset cannot be based on past performance. What rules and regulations would guide the actions that you would take? What actions would you take, and why?

  A group of economics students gathered to study for a test

a group of economics students gathered to study for a test on the money and banking system in the u.s. during a fast

  Custom publishers company specializes in print-on-demand

custom publishers company specializes in print-on-demand books. the company needs information to budget next years

  Overhead cost data for the auerbach enterprises

In this case, you are provided the overhead cost data for the Auerbach Enterprises. Management needs advice in determining how to allocate these costs utilizing a job order costing system either department-wide or company-wide.

  You have been selected as the consultant to develop a

you have been selected as the consultant to develop a business plan for durango manufacturing company which is a

  How much would his employer take from his pay

If Holiday is married with three personal exemptions and had a take-home pay pf $1,020 this week, how much would his employer take from his pay

  Organisations can be affected by abuse and fraud activities

Discuss how health care organisations can be affected by abuse and fraud activities and outline suggested solutions

  Problem regarding the main weakness

Using a simple three-month moving average, make forecasts for April through July. What is the main weakness of using a simple moving average with data that are patterned like this?

  Supplies expense for the year

Teri's Tanning Salons had a balance of $46,300 in its Supplies account on January 1, 2005. The company made two purchases of supplies during 2005, each in the amount of $57,400

  Discuss the double-declining balance depreciation method

Alton uses the double-declining balance depreciation method. What will be the carrying value

  Comparison of organizational forms

Prepare a written memo to Baku and Hanson describing the advantages and disadvantages of each organizational form. Also, from the limited information provided, recommend the organizational form you think they should use.

  How much inventory was requisitioned

During the year, company purchased $305,000 of materials; however, it paid for only $292,500. How much inventory was requisitioned for use on jobs during 2010

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd