Engineering Economics
It is the practice of almost all banks in the Philippines that when they grant a loan, the interest for one year is automatically deducted from the principal amount upon release of money to a borrower. Let us therefore assume that you applied for a loan with a bank and the P80,000 was approved at an interest rate of 14% of which P11,200 was deducted and you were given a check of P68,800. Since you have to pay the amount of P80,000 one year after, what then will be the effective interest rate?

0.1602
0.1647
0.1628
0.1632

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Engineering Economics
The financial analysis:

All of these
Helps a bank to know the financial position of the firm for granting a loan to the firm
Helps to judge the success of the firm's financial plans
Helps a share holder to compare the expected return on his investment in the firm against the expected return from other alternative investment

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