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By selecting the original effective interest rate, the statement insures that only cash flow deficiencies, not fluctuations in market interest rates, will be included in the impairment measurement.
Then you can validate his answer by computing the effective interest rate yourself.
Effective interest rate is the rate that exactly discounts the estimated future cash payments or receipts through the expected life of the financial instrument, or when appropriate, shorter period to the net carrying amount of the financial asset or financial liability.
5 per unit, each unit comprised of ILS1,000 principal amount, representing an effective interest rate of 5.
Represents the effective interest rate of 8,175173%, multiplied by the beginning carrying amount of the notes payable.
When a loan is impaired, the valuation allowance to be established is the difference between the recorded investment of the impaired loan and the present value of the 1oan's expected future cash flows, discounted at the 1oan's effective interest rate (the 1oan's contractual interest rate adjusted for any deferred loan fees or costs, premiums or discounts).
The creditor reduces the effective interest rate on the debt to reflect a decrease in market rates or a reduction in the debtor's credit risk in order to maintain the business relationship.
The effective interest rate is the contractual interest rate adjusted for any deferred loan fees or costs, premiums or discounts existing at the loan's inception.
The Company paid contingent interest on the Notes with respect to the preceding six month period of May 16, 2011 to November 15, 2011, during which period the Notes bore a total effective interest rate of 2.
83 percent a month, or about 10 percent effective interest rate annually.
232% plus accrued interest, which results in an effective interest rate of LIBOR plus 1.
The updates include the manner of interest computation, which should be based on the outstanding balance of a loan at the beginning of an interest period, and the computation and disclosure of effective interest rate, among others.

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