When the Simple Interest Method Is Used to Determine Finance

question 2

Multiple Choice

When the simple interest method is used to determine finance charges, the interest is calculated based on the:

• A) future value of the installments.
• B) average outstanding balance.
• C) actual balance of the loan.
• D) present value of all finance charges.
• E) future value of all finance charges.

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Definitions:

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Cups Per Day

A metric used to quantify the average consumption of cups (could refer to beverages) by an individual or population over a day.

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The monetary value equivalent to one unit of the currency in the United States, symbolizing basic monetary value.

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