If you are offered the following promissory notes, which note you will choose based on effective rate

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Question:

If you are offered the following promissory notes, which note you will choose based on effective rate (using the calendar of 360 days a year)?

Use Simple Discounting.

Option 1

FV= 15,000

I=9%

T= 30 DAYS

REQUIRED:

What is the effective rate?

OPTION 2

FV= 20,000

I=8%

T= 45 DAYS

REQUIRED:

What is the effective rate?

Related Book For answer-question

Managerial Economics A Problem Solving Approach

ISBN: 978-1305259331

4th edition

Authors: Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

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Posted Date: Jun 26, 2019 01:38 AM

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If you are offered the following promissory notes, which note you will choose based on effective rate

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Effective interest rate is calculated through formula ... View the full answer

Managerial Economics A Problem Solving Approach

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