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A Pure Discount Loan Is One Where the Borrower Receives

Question 347

Multiple Choice

A pure discount loan is one where the borrower receives money today and repays the loan with:


A) A single lump sum in the future.
B) Equal monthly payments called annuity payments.
C) Partial monthly payments followed by a balloon payment.
D) Even monthly payments that fully amortize the principal balance.
E) Monthly interest only payments followed by a balloon payment.

Correct Answer:

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