A customer wants to borrower $25,000 for one year from TRC State Bank.The bank offers a discount loan with an interest rate of 15 percent.How much of the loan will be available to the customer?

Question

Quizplus · Accepted Answer

In a discount loan, the interest is deducted from the principal before the loan is disbursed. The interest on a $25,000 loan at 15% is $3,750 ($25,000 * 0.15). Therefore, the customer receives $25,000 - $3,750 = $21,250.

A Customer Wants to Borrower $25,000 for One Year from TRC