To calculate a loan payment,we first compute ________ from the quoted interest rate of the loan,and then equate the outstanding loan balance with ________ of the loan payments and solve for the loan payment.
A) the compounding rate; the present value
B) the discount rate; the present value
C) the discount rate; the future value
D) the compounding rate; the future value

Question

Quizplus · Accepted Answer

To calculate a loan payment, the discount rate is computed from the quoted interest rate, and then the outstanding loan balance is equated with the present value of the loan payments to solve for the loan payment. This approach reflects the time value of money, where the discount rate is used to determine the present value of future payments.

To Calculate a Loan Payment,we First Compute ________ from the Quoted