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The following data is from a microfinance institution (MFI) from Indonesia relating to the components of their current micro-loan interest rates: Capital costs = 6%
- The following data is from a microfinance institution (MFI) from Indonesia relating to the components of their current micro-loan interest rates:
- Capital costs = 6%
- Operating costs = 7%
- Tax expenditures = 3%
- Defaulted loans = 3%
- Net profit after tax = 5%.
Calculate the effective sustainable interest rate. Show all calculations. (Show answer as a percentage, correct to 2 decimal places.)
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Economics Principles and Policy
Authors: William J. Baumol, Alan S. Blinder
12th edition
978-0538453677, 538453672, 978-0538453622, 538453621, 978-0538453653
