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Discussion > Students > IPCC >

Ex and cum interest

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student

[ Scorecard : 430]
Posted On 09 March 2012 at 22:13 Report Abuse

can anyone expain what is ex-interest and what is cum interest with examples plzzzzzzzzzz

 


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Akhil Sharma
Service

[ Scorecard : 126]
Posted On 10 March 2012 at 10:06

In case an interest bearing financial instrument is sold ex interest, it means that the seller will be entitled to get the interest till the date of sales.  In other case where the instrument has been sold cum interest means that the interest till the date of sales also passed on to the purchaser.  Accordingly, the cum interest selling price is always higher than the ex interest price and the difference is usually is the interest accrued till the date of sale. 



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Praveen Kr. Agarwal
Audit executive

[ Scorecard : 145]
Posted On 10 March 2012 at 18:58

In an ex-int transaction price does nt include the amt of interest bt in case of cum int price is inclusive of interest. So while doing the solution of an investment sum u shud first deduct the amount of intrest frm the price of cum int transaction and put that interest amt to intrst column. In case of ex int price does nt include the amount of intrst so just put the ex int amount in the cost column and int amt to the intrst column. The only diff between cum and ex is that in one price is inclusive of int and in another exclusive.


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