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If a Loan Is Being Paid in Installments Instead of One

Question 101

Multiple Choice

If a loan is being paid in installments instead of one lump sum at the end of the loan period, the actual rate of interest


A) Will be lower than the stated rate.
B) Will be the same as the stated rate.
C) Will be higher than the stated rate.
D) Will be unrelated to the stated rate.
E) Cannot be determined without knowing the length of the loan period.

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