Answers
We will discuss this problem with the help of an example :
Let says :
| Loan Amount | 500000 |
| Interest rate | 10% (Simply) |
| Annual Interest Will be | 500000*10% = 50000pa |
| Concept of 360Days/Year | Concept of 365Days/Year |
| Intt./Day : 50000/360 =138.88 | Intt./Day : 50000/365 = 136.99 |
| Annual Interest : 138.88*365 = 506910.00 (Round off) | Annual Interest : 50001.00 (Round off) |
| Result : Better to Give | Result : Better to Receive |
| Interest revenue on assets should be Recognized as per 360days/year concepts | Interest expenses on Liability should be recorded as per 365days/year concept |
| Income should be booked | Expenses should be recorded |
| Also Known as Bank Interest Method | Called Stated Interest Method. |
Answer : As you see its very clear with the example above, a rational way of policy for interest value. a professional will always go with the both the options.
1. Mr. Max Powers, VP for national lending instruct correctly and in his decision is rational. Financial ramification of using a 365-days year opposed to a 360-days year on both the interest expenses and interest revenue.
2.
As National Lending is funding to clients it should follow 360days/year concept in case of interest income.
3. Yes, Both method can be used in the company however in case of OUTSIDE FUNDING always go with 360-days/year and INCOMING LOAN 365-Days/year should be follow.
4. with the example its clarify that Mr. Max is professional and his decision is rational.
5. Banks are always follows 360-days/year Method.
Similar Solved Questions
1 answer
Problem 11-12 Using CAPM A stock has a beta of 1.10, the expected return on the...
Problem 11-12 Using CAPM A stock has a beta of 1.10, the expected return on the market is 12 percent, and the risk-free rate is 3.6 percent. What must the expected return on this stock be? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.1...
1 answer
QUESTION 10 A study on diet and weight found that the correlation coefficient between weight and...
QUESTION 10 A study on diet and weight found that the correlation coefficient between weight and daily serving of vegetables and fruits is -0.6. What does this mean? 1. Weight increases as daily intake of vegetables and fruits increases 2. Weight decreases as daily intake of vegetables and fruits in...
1 answer
QUESTION 12 2 points Save Answer In a baseball game, the probability that Peter gets on...
QUESTION 12 2 points Save Answer In a baseball game, the probability that Peter gets on base safely isIf he comes to bat four times, what is the probabilitv that he will get on base safely at least three times? * Use the equation editor to enter your answer as a fraction Pann p words:0 ▲ QUEST...
1 answer
2. Decipher the code" snippet lines ... (20 points) As done in class, review the code...
2. Decipher the code" snippet lines ... (20 points) As done in class, review the code below, and based on what we've learned about Java: • standard naming conventions • statement "types" • syntax ... describe what each line of code is doing - in plain English, but use ...
1 answer
There are two capacitors of values 50μF and 22μF. What is the total capacitance if they...
There are two capacitors of values 50μF and 22μF. What is the total capacitance if they are connected in series...
1 answer
If M2+ is Ca2+ and Z2- is CO32-, would you raise or lower the pH if...
If M2+ is Ca2+ and Z2- is CO32-, would you raise or lower the pH if you wanted to make a precipitate? Why? ...
1 answer
Consider the titration of 40.0 mL of 0.0600 M (CH3)3N (a weak base; Kg = 6.40e-05)...
Consider the titration of 40.0 mL of 0.0600 M (CH3)3N (a weak base; Kg = 6.40e-05) with 0.100 M HCl. Calculate the pH after the following volumes of titrant have been added: (а) 0.0 mL (b) 6.0 mL (c) 12.0 mL pH pH pH (d) 18.0 mL (e) 24.0 mL (f) 45.6 mL рH - рH: = pH...
1 answer
I need the closing entries filled out based on the adjusted trial balance provided please. PDF...
I need the closing entries filled out based on the adjusted trial balance provided please. PDF worksheet.pdf X + V - a x 6 a worksheet.pdf E 0 0 i oft lo file:///C:/Users/Meredith/Desktop/worksheet.pdf + - Fit to page OD Page view | A' Read aloud L Add notes o e l so Adjusting entries Debit Cre...
2 answers
6. Construct circuits from inverters, AND gates, and OR gates for each of the following Boolean...
6. Construct circuits from inverters, AND gates, and OR gates for each of the following Boolean expressions. (a) xv)...
1 answer
Please solve this problem as soon as possible. Thank you Class Discussion Exercise On January 1,...
please solve this problem as soon as possible. Thank you Class Discussion Exercise On January 1, 2018, the Mason Manufacturing Company began construction of a building to be used as its office headquarters. The building was completed on September 30, 2019. Expenditures on the project were as follows...
1 answer
Part A With what minimum speed must you toss a 200 g ball straight up to...
Part A With what minimum speed must you toss a 200 g ball straight up to hit the 15-m-high roof of the gymnasium if you release the ball 1.5 m above the ground? Solve this problem using energy. Express your answer using two significant figures. (answer v_min = m/s) Part B With what speed does the ba...
1 answer
A certain binary star system consists of two stars with masses m1 and m2, separated by...
A certain binary star system consists of two stars with masses m1 and m2, separated by a distance b. A comet, originally nearly at rest in deep space, drops into the system and at a certain point in time arrives at the midpoint between the two stars. For that moment in time, find its velocity, v, sy...
1 answer
A telephone survey uses a random digit dialing machine to call subjects. The random digit dialing...
A telephone survey uses a random digit dialing machine to call subjects. The random digit dialing machine is expected to reach a live person 15% of the time. Out of 8 attempts, what is the expected value (mean)___ , the variance___ and the standard deviation___ ?...
1 answer
2. (10 points) The structure for the amino acid histidine is shown below (at pH 1)....
2. (10 points) The structure for the amino acid histidine is shown below (at pH 1). Write the chemical equations for the ionic dissociations of histidine (as the pH increases) Determine the isoelectric point for histidine and indicate the structure present at the isoelectric point. The pka values fo...
1 answer
Can question 7.58 and 7.69 be answered please 7.6 7.58 When (R)-3-bromo-2,3-dimethylpentane is treated with sodium...
can question 7.58 and 7.69 be answered please 7.6 7.58 When (R)-3-bromo-2,3-dimethylpentane is treated with sodium hydroxide, four different alkenes are formed. Draw all four products and rank them in terms of stability. Which do you expect to be the major product? 7.59 When 3-bromo-2,4-dimethyl...
1 answer
Please answer correctly so i can study these Question 9 Compute the modulus (11+2i| D Question...
please answer correctly so i can study these Question 9 Compute the modulus (11+2i| D Question 10 Find the Rel(9+41)/(4+01)) This is division. No new data to save. Last checked at 10:28am MacBook Air DOD...
1 answer
Combing loT with ML may help assemble a more complete context of the members (customers) QUESTION...
Combing loT with ML may help assemble a more complete context of the members (customers) QUESTION 10 Based on scenario in the previous question, which one of the following statements below is wrong? If the accuracy improves to 99% then the system may not be able to reduce both Type l and Type 1 erro...
1 answer
The frequency bandwidth of the signal 4. cos 1000x1+ sin 2000 is: L The frequency bandwidth...
The frequency bandwidth of the signal 4. cos 1000x1+ sin 2000 is: L The frequency bandwidth of the signal cos 2000x + cos 1000...