Given an identical contract rate,the discount loan will have a higher APR than a simple interest loan.

Question

Quizplus · Accepted Answer

This is because a discount loan typically involves an upfront deduction of interest from the loan disbursement amount, whereas a simple interest loan charges interest on the full principal amount throughout the loan term. The APR calculation takes into account the total interest paid over the loan term, which will be higher for the discount loan due to the upfront deduction.

Given an Identical Contract Rate,the Discount Loan Will Have a Higher