Examlex
A firm will borrow $1 million for six months on a discount basis. The annual interest rate on the loan is 6%. What is the annual percentage cost of the loan?
Compounded
The process where interest is calculated on the initial principal and also on the accumulated interest of previous periods of a deposit or loan.
Annually
Annually means occurring once every year or pertaining to a period of one year.
Compounded
The process of earning interest on previously earned interest, leading to an increase in the total amount over time.
Monthly
Occurring or produced once a month.
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