Computing the amount of original loan, Accounting Basics

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Computing the amount of original loan

Question 1) To facilitate restructure some of its debt, General Motors decided to pay off one of its short-term loans. If a company borrowed money 1 year ago at the interest rate of 12% per year and the total cost of re-paying a loan was $120 million, compute the amount of the original loan?

A. PV= $107,142,857.14
B. FV= $120,000,000.00
C. RATE= 12%
D. Nper= 1

Question 2) Two years ago I bought some boxes of flooring for $20 at the auction. I just sold them for $30. What efficient annual rate of return did I make on my investment on a basis of compound interest?

A. PV = $20.00
B. FV = $(30.00)
C. RATE = 22.474%
D. Nper = 2

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Accounting Basics: Computing the amount of original loan

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