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should this bank charge on its depu 3.2 (5 marks) Ms. Hoa asks for a VND 1.5 billion loan for one year. The bank tells her th

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Answer #1

Upfront interest = VND 195 Million

Loan amount received = VND 1.405 Billion

= 1.405 x 1,000 million

= VND 1,405 million

Effective rate of interest = Upfront interest/Loan amount received

= 195/1,405

= 13.88% (rounded to two decimals)

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