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Resit 24/25 S1 Exercise 5.1

Resit 24/25 S1 Exercise 5.1

by Inês Santos Silva Pinto de Abreu -
Number of replies: 1

Good afternoon, 

I'm solving the exercise 5.1 of this exam and in the calculation of the interest of the long-term loan I divided it by 12 because it is said that the interest rate is "annual interest rate of 1%". However, in the solutions it was computed with 1% for the month of November. Can you explain me why?

In reply to Inês Santos Silva Pinto de Abreu

Re: Resit 24/25 S1 Exercise 5.1

by Pedro Pinto da Silva Perdigão -
Hello Inês,

Interests on Long Term loans are paid annually, not monthly. It is stated in the question: "The loan bears annual payments of capital of 10 000 € and interest (...)"

Good study!