A Theoretical Difference Between the Effective Interest Method and the Straight-Line

question 48

Multiple Choice

A theoretical difference between the effective interest method and the straight-line amortization method is that

• A)the effective interest method is easier to use
• B)the effective interest method can be used if there is a material difference in the computation when compared to the straight-line method
• C)the effective interest method produces a result that is based on a constant rate of interest
• D)the effective interest method produces a result that is based on a constant interest expense

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