If a Loan Is Being Paid in Installments Instead of One

question 118

Multiple Choice

If a loan is being paid in installments instead of one lump sum at the end of the loan period, the actual rate of interest

• A) Will be lower than the stated rate.
• B) Will be the same as the stated rate.
• C) Will be higher than the stated rate.
• D) Will be unrelated to the stated rate.
• E) Cannot be determined without knowing the length of the loan period.

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Definitions:

United States

A country in North America consisting of 50 states, known for its large size, diverse population, and significant impact on global culture and economy.

Individualistic

pertains to the principle or habit of being self-reliant and valuing personal independence and individuality over collective action or identity.

African American Woman

A female individual of African descent living in or originating from the United States, often dealing with unique cultural and societal experiences.

European American Man

Refers to an individual male residing in the United States who is of European descent or identifies with European cultural heritage.