• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
Free ACCA & CIMA online courses from OpenTuition

Free ACCA & CIMA online courses from OpenTuition

Free Notes, Lectures, Tests and Forums for ACCA and CIMA exams

  • ACCA
  • CIMA
  • FIA
  • OBU
  • Books
  • Forums
  • Ask AI
  • Search
  • Register
  • Login
  • ACCA Forums
  • Ask ACCA Tutor
  • CIMA Forums
  • Ask CIMA Tutor
  • FIA
  • OBU
  • Buy/Sell Books
  • All Forums
  • Latest Topics

20% off ACCA & CIMA Books

OpenTuition recommends the new interactive BPP books for September 2025 exams.
Get your discount code >>

P4 Question 3 June 2015

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › P4 Question 3 June 2015

  • This topic has 7 replies, 2 voices, and was last updated 9 years ago by John Moffat.
Viewing 8 posts - 1 through 8 (of 8 total)
  • Author
    Posts
  • March 7, 2016 at 12:35 pm #304021
    Arishka
    Member
    • Topics: 10
    • Replies: 13
    • ☆

    In question 3 June 2015 , in computing the interest payable on the $30 mil loan , the stated interest is used.

    Why is this ?

    I thought the 8% would be used only in the annuity computation.

    Please assist.

    March 7, 2016 at 3:16 pm #304054
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54699
    • ☆☆☆☆☆

    Yes, but the reason the total of the annuity payments is more than the 30M is because there is interest being charge at 8% on the amount outstanding each year.

    The table in the examiners answer ‘proves’ this (the 2 outstanding at the end is simply because of rounding), and the interest each year will be an expense in the statement of profit or loss.

    March 7, 2016 at 4:12 pm #304079
    Arishka
    Member
    • Topics: 10
    • Replies: 13
    • ☆

    Why is 8% used to compute interest and the annuity amount ?

    March 7, 2016 at 4:31 pm #304084
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54699
    • ☆☆☆☆☆

    Because the second note (i) says that it is an 8% bond 🙂

    March 7, 2016 at 4:33 pm #304086
    Arishka
    Member
    • Topics: 10
    • Replies: 13
    • ☆

    Apologies if I am being silly , but i thought 8% bond meant that PMT is computed at 8% not the interest

    March 7, 2016 at 5:26 pm #304118
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54699
    • ☆☆☆☆☆

    No – it means the interest is 8% 🙂

    March 7, 2016 at 5:28 pm #304122
    Arishka
    Member
    • Topics: 10
    • Replies: 13
    • ☆

    ok thanks

    March 7, 2016 at 5:29 pm #304124
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54699
    • ☆☆☆☆☆

    You are welcome 🙂

  • Author
    Posts
Viewing 8 posts - 1 through 8 (of 8 total)
  • You must be logged in to reply to this topic.
Log In

Primary Sidebar

Donate
If you have benefited from our materials, please donate

ACCA News:

ACCA My Exam Performance for non-variant

Applied Skills exams is available NOW

ACCA Options:  “Read the Mind of the Marker” articles

Subscribe to ACCA’s Student Accountant Direct

ACCA CBE 2025 Exams

How was your exam, and what was the exam result?

BT CBE exam was.. | MA CBE exam was..
FA CBE exam was.. | LW CBE exam was..

Donate

If you have benefited from OpenTuition please donate.

PQ Magazine

Latest Comments

  • julio99 on Impairments – Impairment (CGU) – ACCA Financial Reporting (FR)
  • effy.sithole@gmail.com on EPS – diluted EPS Example – ACCA Financial Reporting (FR)
  • Ken Garrett on The Finance Function in the Digital Age – CIMA E1
  • DeborahProspect on ACCA SBR Specimen Exam 2 Question 1
  • darshan.69 on Chapter 9 Pension Schemes TX-UK FA2023

Copyright © 2025 · Support · Contact · Advertising · OpenLicense · About · Sitemap · Comments · Log in