The effective interest rate is
A. higher on a loan if interest is paid at maturity.
B. lower if the loan is a discount loan.
C. higher if the loan is a discount loan.
D. not affected by whether the loan is a discount loan or a loan with interest paid at maturity.
Answer:C
The effective interest rate is
A. higher on a loan if interest is paid at maturity. B. lower if the loan is a discount loan. C. higher if the loan is a discount loan. D. not affected by whether the loan is a discount loan or a loan with interest paid at maturity.