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Hi Sir,
A silly question as I can’t get it right. June 2018, question 31-The interest on debt is ‘20,000 8% loan notes. If I am working by $’000, then my answer would be presented as follows: 0.08 * 20=1.6. However, the examiner has worked it out as 0.08 * 2,000. How come please?
Thank you.
The loan notes have a nominal value of $100 (per the question) and therefore the total is 20,000 x $100 = $2,000,000
8% x $2,000,000 = $160,000 (or 160 in thousands!)
Have you not watched my free lectures on all of this? The lectures are a complete free course for Paper FM and cover everything needed to be able to pass the exam well.
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