Question
PT Mustika is considering manufacturing protective cases for a popular new smartphone. Management decides to borrow Rp 400.000.000 from each of two banks, Sejahtera Bank
PT Mustika is considering manufacturing protective cases for a popular new smartphone. Management decides to borrow Rp 400.000.000 from each of two banks, Sejahtera Bank and Sentosa Bank. On the day that you visit both banks, the quoted prime interest rate is 6.5 %. Each loan is similar in that each involves a 300-day note, with interest to be paid at the end of maturity days. Assume a 365-day year. Sejahtera Bank. The interest rate was set at 1.5 % above the prime rate on Sejahtera Bank's fixed-rate note. Over the loan period, the rate of interest on this note will remain at the 1.5 % premium over the prime rate regardless of fluctuations in the prime rate. Sentosa Bank. The bank sets its interest rate at 1 % above the prime rate on its floating-rate note. The rate charged over the loan period will vary directly with the prime rate.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started