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interest free loan

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AAA Exams › interest free loan

  • This topic has 3 replies, 2 voices, and was last updated 3 years ago by Kim Smith.
Viewing 4 posts - 1 through 4 (of 4 total)
  • Author
    Posts
  • October 30, 2021 at 11:23 am #639468
    Noah098
    Member
    • Topics: 935
    • Replies: 352
    • ☆☆☆☆☆

    maam I just wanted to confirm this since it turned up in one of the AAA questions. In case of interest free loan the effective interest rate that we use( which is the market interest rate applicable on similar instruments) at the inception fo the loan to figure out the FV(which is essentially the PV of future clash flows), that specific effective interest remains fixed right thought the term of the loan?

    October 30, 2021 at 11:48 am #639470
    Kim Smith
    Keymaster
    • Topics: 135
    • Replies: 8351
    • ☆☆☆☆☆

    Yes – it is an implicit rate.

    October 31, 2021 at 1:14 am #639516
    Noah098
    Member
    • Topics: 935
    • Replies: 352
    • ☆☆☆☆☆

    perfect! thank you:)

    October 31, 2021 at 7:53 am #639525
    Kim Smith
    Keymaster
    • Topics: 135
    • Replies: 8351
    • ☆☆☆☆☆

    You’re welcome

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    Posts
Viewing 4 posts - 1 through 4 (of 4 total)
  • The topic ‘interest free loan’ is closed to new replies.

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