question archive You are the accounting manager for Kool Ragz, Inc
You are the accounting manager for Kool Ragz, Inc
Subject:AccountingPrice: Bought3
You are the accounting manager for Kool Ragz, Inc., a manufacturer of men’s and women’s clothing. The company needs to borrow $1,800,000 for 90 days in order to purchase a large quantity of material at “closeout” prices. The interest rate for such loans at your bank, Coastal Bank, is 11%, using ordinary interest.
a. What is the amount of interest on this loan?
b. After making a few “shopping” calls, you find that City National Bank will lend at 11%, using exact interest. What is the amount of interest on this offer?
c. In order to keep your business, Coastal Bank has now offered a loan at 10.5%, using ordinary interest. What is the amount of interest on this offer?
