On quesiton C: Johnson’s borrowed $282,000 at a(n) 9 percent annual interest rate on April 1 of the current year to expand its boat storage facility. The loan requires Johnson’s to pay the interest quarterly until the note is repaid in three years. Johnson’s paid quarterly interest on July 1 and October 1. Can you explain why the forumla is 282000*9%*2/12? I understand 282000*9% = 25380 (yearly interest) But why mulitpy by 2?

On quesiton C: Johnson’s borrowed $282,000 at a(n) 9 percent annual interest rate on April 1 of the current year to expand its boat storage facility. The loan requires Johnson’s to pay the interest quarterly until the note is repaid in three years. Johnson’s paid quarterly interest on July 1 and October 1. Can you explain why the forumla is 2820009%2/12? I understand 282000*9% = 25380 (yearly interest) But why mulitpy by 2?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter19: Lease And Intermediate-term Financing

Section: Chapter Questions

Problem 19P

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