- This topic has 3 replies, 2 voices, and was last updated 7 years ago by
.
Viewing 4 posts - 1 through 4 (of 4 total)
- Posts
in part (A) in KESHI CO (DEC 14),
in the calculation of effective interest for 4.36%
the calculation will be 458010 / 18million x (12/7) x 100 = 4.36%
why is it 12/7 ? why not 7/ 12 ????
458010/18M is the effective interest over 7 months.
We need the effective annual interest. There are 12 months in a year, so we multiply by 12/7.
You should watch my free lectures on interest rate risk – I explain this in the lectures.
why do we actually calculate the effective annual interest ?
i mean like what is the reason for calculating effective annual interest when the net cost is already displayed in the working.
Viewing 4 posts - 1 through 4 (of 4 total)
- The topic ‘KESHI CO ( DEC 14)’ is closed to new replies.