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Identify a good buffer.
Pure Discount Loan
A loan where the borrower receives a sum of money upfront and repays a higher amount at the end of the loan period, effectively paying interest by the difference.
Lump Sum Payment
An isolated financial disbursement occurring once, instead of being divided into multiple payments over a duration.
Annual Interest Payments
Periodic payments made to bondholders, typically annually, that represent the interest earned on the investment.
Effective Annual Rate
The real return on an investment, taking into account the effect of compounding interest over a year.
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