ABC would need cash of P5,000,000. Several banks offered different loan conditions. One of the loans has a term of 6 months, interest of 5%, and compensating balance of P50,000 Required: 11. How much should the face value of the loan be? 12. How much is the simple effective annual interest?
Mortgages
A mortgage is a formal agreement in which a bank or other financial institution lends cash at interest in return for assuming the title to the debtor's property, on the condition that the obligation is paid in full.
Mortgage
The term "mortgage" is a type of loan that a borrower takes to maintain his house or any form of assets and he agrees to return the amount in a particular period of time to the lender usually in a series of regular equally monthly, quarterly, or half-yearly payments.
Answer the given problems. Use 360 days in a year.
Problem D: Effective cost of Short‐term Loan:
ABC would need cash of P5,000,000. Several banks offered different loan conditions. One of the loans has a term of 6 months,
interest of 5%, and compensating balance of P50,000
Required:
11. How much should the face value of the loan be?
12. How much is the simple effective annual interest?
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