A borrower has two alternatives for a loan: (1) issue a $240,000, 60-day, 8% note or (2) issue a $240,000, 60-day note that the creditor discounts at 8%. Assume a 360-day year.
a. Calculate the amount of the interest expense for each option.
A borrower has two alternatives for a loan: (1) issue a $240,000, 60-day, 8% note or (2) issue a $240,000, 60-day note that the creditor discounts at 8%. Assume a 360-day year.
a. Calculate the amount of the interest expense for each option.
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