Assume that your local bank gives you a $1,000 loan at 10% per year but deducts the

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Assume that your local bank gives you a $1,000 loan at 10% per year but deducts the interest in advance. Is 10% the “real” rate of interest that you will pay? How can the true interest rate be calculated?

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Using Financial Accounting Information The Alternative to Debits and Credits

ISBN: 978-1133161646

7th Edition

Authors: Gary A. Porter, Curtis L. Norton

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Question Posted: Jan 12, 2012 02:15 AM

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Assume that your local bank gives you a $1,000 loan at 10% per year but deducts the

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No the real rate of interest is not 10 The real interest rate could be ca...View the full answer

Using Financial Accounting Information The Alternative to Debits and Credits

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