Question 168936
That rate is given as 7% per year. You are only taking out the loan for 4 months. 4 months is 4/12 = 1/3 year. So you will only be paying 1/3 of the yearly interest

{{{Interest = (20000 * 0.07)/3}}}
{{{466.67}}}}

So your proceeds in the event you are to repay 20000 in 4 months will be 20000-466.67 = 19533.33

So, the bank will give you 19533.33 today and expect you to replay 20000 in 4 months.