Question

A credit company offered to finance a communication equipment essential for the mobilization of a project....

A credit company offered to finance a communication equipment essential for the mobilization of a project. You need P1M which has to be repaid of 5M in 5 years.

a. If simple interest is charged, what is the rate?

b. If compound interest is charged, what is the rate?

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Homework Answers

Answer #1

a)

Interest = ( 4 100) 5

Simple interest = 80 %

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b)

If compound interest is charged.

( 1 + interest rate) =

Interest rate = 37.97 %

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