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My question is on page 2 Question 1 additional information no.4.
Why are we using the whole unsubsidised 6% when discounting the PV of the interest lost because of giving a loan at 3%? aren’t we suppose to discount by 3% as we are loosing only 3%?
On the Amortisation Schedule, why are we still using the assumed 6% instead of the actual 3% as we’ve already accounted for the loss of 3% at the initial recognition of a loan that resulted in a loan debtor of $46.01?
I wish you can understand my questions!!!
Thank you.
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