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Chapter 16: Financial Assets Example 2 part 3.Debentures
Dear Chris,
First of all I would like to thank you for your clear and concise lectures.
Effective rate of interest as per Example 2 on page 64 is 5.71%. Using effective rate to calculate interest income, the result would be 55,958 (980,000×5,71%).
However as per the printed answer in page 146 the interest income for the first year is 52,528 (980,000×5,36%)
There is no mention of 5,36% in the question. Perhaps I’m missing something. Please could you clarify me where 5,36% comes from?
Thank you
Hi Isabel,
Thank you for your kind comments, they’re much appreciated.
You’ll be glad to know that you’re not missing anything as there is an error in the answer that I need to update. The 5.36% should not be there and it should be 5.71% as per the question.
Thanks and good luck with the studying. You know where we are if you need any help.
Chris
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