Question
A loan of $20,000 is obtained from the bank. The promissory note specifies that $2,500 interest is to be paid at the end of the
A loan of $20,000 is obtained from the bank. The promissory note specifies that $2,500 interest is to be paid at the end of the year along with the principal. 39.
What is the effective interest rate if the bank requires interest to be paid at origination?
a. 12.50%
b. 14.29%
c. 14.71%
d. 25.00%
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Accounting
Authors: Carl S. Warren, James M. Reeve, Jonathan Duchac
26th edition
128574361X, 978-1305446052, 1305446054, 978-1285743615
