Oriole Incorporated issued a $106,000, 5-year, zero-interest-bearing note to Cheyenne Corp. on January 1, 2020, and...
Oriole Incorporated issued a $106,000, 5-year, zero-interest-bearing note to Cheyenne Corp. on January 1, 2020, and received $57,000 cash. Oriole uses the effective interest method.
Using (1) a financial calculator or (2) Excel function Rate, calculate the implicit interest rate. (Round answer to 2 decimal places, e.g. 52.25%.)
| Implicit interest rate | Enter your answer in accordance to the question statement % |
Homework Answers
Solution:
| Present value | $57,000.00 |
| Future value | $106,000.00 |
| Period (In years) | 5 |
| Rate | 13.21% |
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