When the Declining-Balance Method of Calculating Interest on Installment Loans

question 73

True/False

When the declining-balance method of calculating interest on installment loans is used,the simple rate of interest and the APR will differ only if fees boost the finance charge.

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Definitions:

Fraud in the Inducement

A deceptive practice where one party uses fraudulent acts to entice another party into a contract, which can render the contract voidable.

Real Defense

A genuine, substantial defense claim raised in a legal dispute, often based on factual evidence and legal principles.

Holders in Due Course

Parties who have obtained a negotiable instrument in good faith and for value, and thus have certain protections against defenses and claims that could be asserted against the original payee.

Alteration

Alteration involves making a change or modification to something, often to improve it or adjust it to different requirements.