If the number of payments and loan duration are the same, which type of interest calculation method would have an effective interest rate higher than the nominal rate?

Question

Quizplus · Accepted Answer

Add-on and bank discount methods calculate interest on the full amount of the loan for the entire loan term, regardless of the number of payments made. This results in a higher effective interest rate than the nominal rate.

If the Number of Payments and Loan Duration Are the Same