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Hi, Just need help with a simple question.
I can do loan calculations in a question without much trouble, but get thrown by the names of the different rates when trying to apply in every day life.
What are the names of the rates I would use to calculate 1) the finance cost and 2) the interest paid.
Thanks in advance
Interest paid will say, typically in a trial balance, “interest paid” and it is saying that cash has actually been paid out to settle the liability of interest that has accrued on a loan
Finance cost (or interest charge) is the amount of interest that is calculated at the appropriate percentage on the amount borrowed. It may or may not have been paid. It is, therefore, the amount of interest that relates to the year
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