Page 94 - DBP5043
P. 94
CALCULATE THE EFFECTIVE COST OF
SHORT TERM LOAN
Discount interest
Example 7
Sharina wishes to borrow RM 20,000 for one year. The bank offers a
discount interest loan at 14% per annum. Calculate the effective
annual interest cost of the loan.
Example 8
Sharina wishes to borrow RM 20,000 for 6 month. The bank offers a
discount interest loan at 14% per annum. Calculate the effective
annual interest cost of the loan.
Example 9
Sharina wishes to borrow RM 20,000 for one year. The bank offers a
discount interest loan at 14% per annum and requires Sharina to
maintain a compensating balance of 20% of the loan amount .
Calculate the effective annual interest cost of the loan.
