Question 4- Laterial Kaplan exam kit (pg 9)

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June 9, 2011 at 1:47 pm #48597
ACCA LOVER!!!
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Hello,

I have a small question on the financial instrument part of this question… W5 answer (pg126)

There is a calculation for a financial liability instrument where a 30 million cash injection will be paid back as 37.5 million.. what i do not understand is why the interest recieved per annum in the calc is 1.76 million? The rate is 4.7%.. i thought it would be either the 30mil * 4.7%= 1.41mil or 30+3(effective interest)= 33*4.7%= 1.55mil?

HELPPPPPPP

Thanks

Jen
June 9, 2011 at 1:48 pm #82265
ACCA LOVER!!!
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Oh actually i think i just answered my question its the 37.5million *4.7%= 1.76.. doohhhhhhh…….. i really need to engage my brain! Sorry for the bother!!! ALthough if anyone has a dummies guide to financial instruments then please inform me!

Thanks

Jen
June 9, 2011 at 4:30 pm #82266
MikeLittle
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Good luck next week – let’s hope that any question in the examination is pitched at dummy level!

🙂
June 10, 2011 at 12:56 pm #82267
ACCA LOVER!!!
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I can hope and pray!!!!

Thanks for the luck, i am trying to get as much as possible!!!!
June 14, 2011 at 1:25 pm #82268
MikeLittle
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I’m not sure that canvassing for good luck messages actually works in the exam! But anyway, I hope you’ve passed it
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