For example if a 1-year loan is stated as 20000 and the, Finance Basics

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For example if a 1-year loan is stated as 20000 and the

In a discount interest loan, you pay the interest payment up front. For example, if a 1-year loan is stated as $20,000 and the interest rate is 10%, the borrower "pays" 0.10 × $20,000 = $2,000 immediately, thereby receiving net funds of $18,000 (=$20,000-$2,000) and repaying $20,000 in a year. What is the implied rate on this loan?

a. 9.5%
b. 20%
c. 10%
d. 11.1%

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Finance Basics: For example if a 1-year loan is stated as 20000 and the

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Finance Basics: For example if a 1-year loan is stated as 20000 and the

Reference No:- TGS0607209

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