Respuesta :
The tv costs you in total $75.
When the purchase price and interest expense is added in the cost of tv the total cost would be $75. Initially the cost was $40. The interest expense of $10 is added in the price and purchase price of $25 is added in the initial price of tv.
An interest expense is the cost incurred by an entity for borrowed funds. Interest expense is a non-operating expense shown on the income statement. It represents interest payable on any borrowings—bonds, loans, convertible debt or lines of credit. It is essentially calculated as the interest rate times the outstanding principal amount of the debt.
Interest expense on the income statement represents interest accrued during the period covered by the financial statements, and not the amount of interest paid over that period. While interest expense is tax-deductible for companies, in an individual's case, it depends on their jurisdiction and also on the loan's purpose.
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