Ask Question
21 February, 02:13

On April 31, 2018, Elkhorn Associates borrowed $10 million cash from Colonial Bank and issued a 5-month, noninterest-bearing note, priced to yield an effective interest rate of 10%. The stated discount rate on this loan is:

a. More than the effective interest rate.

b. Less than the effective interest rate.

c. Equal to the effective interest rate.

d. Unrelated to the effective interest rate.

+1
Answers (1)
  1. 21 February, 02:30
    0
    b. Less than the effective interest rate

    Explanation:

    The stated discount rate on this loan is Less than the effective interest rate

    As the note is noninterest-bearing note, the stated discount rate on this loan is less than the effective interest rate.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “On April 31, 2018, Elkhorn Associates borrowed $10 million cash from Colonial Bank and issued a 5-month, noninterest-bearing note, priced ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers