If an Invoice Indicates That Interest at the Rate of 1.2

question 249

Short Answer

If an invoice indicates that interest at the rate of 1.2% per month will be charged on overdue amounts, what effective rate of interest will be charged?

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Definitions:

Compliance

The act of conforming to or following rules, regulations, standards, or laws.

Reserves

Funds or assets set aside to meet future liabilities, unexpected costs, or potential financial obligations.

Reserve Requirement

The minimum amount of reserves a bank must hold against deposits, set by central banks to ensure bank liquidity and stability.

Deposits

Funds placed in a bank account that can be withdrawn by the account holder, typically used for safekeeping or to earn interest.