Asked by Poppin galaxy on Jun 04, 2024
Verified
Silver Falls Finances, Inc. made the following two loans using a discount rate to compute the charge, and then loaned the proceeds to their clients. Compute the amount of discount, the proceeds, and the actual interest rate based upon the proceeds rather than the face value. Use a 360-day year and compute actual rates to the nearest 1/100 of a percent.
Discount Rate
The percent used for calculating a trade or cash discount. The interest percent charged by the buyer of a discounted note.
Actual Interest Rate
A rephrased term for the effective interest rate that takes into account the compounding period, fees, or other loan terms, providing a true cost of borrowing.
- Execute discount computations on loans and understand the key principles of the discount method.
- Achieve the capability to establish and quantify the actual interest rates by focusing on the proceeds rather than the loan's face value.
Verified Answer
SS
Learning Objectives
- Execute discount computations on loans and understand the key principles of the discount method.
- Achieve the capability to establish and quantify the actual interest rates by focusing on the proceeds rather than the loan's face value.