K
Kchapman22
Member
Hello
In general there was a question where the total interest paid for a £5000 loan would be calculated in the case where it was paid and then withdrawn at the same time.
The discount rate here was said to be 0.05. I can understand that the discount rate multiplied by the principal gives the interest paid at the start of the period.
However when I tried to calculate using the accumulation factor fit discount rates from one period to the next it didn't produce the right answer.
Is it possible to have an explanation using accumulating factors for this?
Thanks
In general there was a question where the total interest paid for a £5000 loan would be calculated in the case where it was paid and then withdrawn at the same time.
The discount rate here was said to be 0.05. I can understand that the discount rate multiplied by the principal gives the interest paid at the start of the period.
However when I tried to calculate using the accumulation factor fit discount rates from one period to the next it didn't produce the right answer.
Is it possible to have an explanation using accumulating factors for this?
Thanks