What happens when a bank charges discount interest on a loan, Financial Management

Assignment Help:

What happens when a bank charges discount interest on a loan?

When a bank charges reduction in interest on a loan the required interest payment is subtracted from the loan proceeds at the time the loan is made.  This makes the efficient interest rate greater than the stated rate.

 

 


Related Discussions:- What happens when a bank charges discount interest on a loan

A company has total debt , A company has total debt of $1,200 and a debt-eq...

A company has total debt of $1,200 and a debt-equity ratio of 0.5. What will be  the value of the total assets?

Need for credit and its nature, Need for Credit and its nature On the d...

Need for Credit and its nature On the demand side of the economy are the consumers of goods and services who require funds basically for acquiring certain consumer durables. Th

Calculate the nwc , Suppose you can decrease the cash on hand and the compa...

Suppose you can decrease the cash on hand and the company will require holding Net Working Capital (including cash) equal to 4% of the next year's sales going forward.  This will r

Profit & loss account, waht are the basic functions of profit & loss accoun...

waht are the basic functions of profit & loss account

What is usual approach of capital structure, Q. What is usual Approach of c...

Q. What is usual Approach of capital Structure? Ans. Traditional Approach: - The traditional approach establishes middle among the Net Income approach and the Net Operating Inc

Coverage ratio, Coverage ratios give the relationship between the financial...

Coverage ratios give the relationship between the financial charges of a firm and its ability to service them. The four most commonly used coverage ratios are:

Causes of risks, Q. Causes of Risks 1) Wrong decision of what to invest...

Q. Causes of Risks 1) Wrong decision of what to invest in. 2) Wrong timing of investments. 3) Nature of instruments invested such as shares or bonds, chit funds, benefit

Explin the triangular arbitrage, What is triangular arbitrage?  What is a c...

What is triangular arbitrage?  What is a condition that will give increase to a triangular arbitrage opportunity? Answer:  Triangular arbitrage is the method of trading out of th

How cash budget and capital budget relate to pro forma, Explain how the cas...

Explain how the cash budget and the capital budget relate to pro forma financial statements. The cash budget depicts the projected flow of cash in and out of the firm for fixed

Final stage of career, Q. Final stage of career? The final stage in one...

Q. Final stage of career? The final stage in one's career is difficult for everyone but is it hardest for those who have had continued successes in the earlier stages. After se

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd