On a 1-year loan for R10,000, a firm would be better off borrowing at a rate of 9.5 percent discounted interest than 9 percent simple interest.

Question

Quizplus · Accepted Answer

In discounted interest, the interest is deducted from the principal at the start, resulting in a higher effective interest rate compared to simple interest, where interest is calculated on the principal amount only.

On a 1-Year Loan for R10,000, a Firm Would Be