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currently the bank is providing one year discount loans at 7.7% if you were required to repay 300,000$ at the end of the loan for one year, how much would the bank have given you at the start of the loan? what is the effective rate on these loans?
Score: 0 of 1 pt 4 of 100.com HW Score: 0%, of 10 pts Question Help P15-5 (similar to) Discount loan. UpFront Blank es discou
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Answer #1

Repayment = Principle + Interest

300000= x + x*7.7% [assuming x = principle amount]

300000=1.077x

x= 278551.53

Effective rate is 7.7%

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