What happens when a bank charges discount interest on a loan, Financial Management

What happens when a bank charges discount interest on a loan?

When a bank charges reduction in interest on a loan the required interest payment is subtracted from the loan proceeds at the time the loan is made.  This makes the efficient interest rate greater than the stated rate.

 

 

Posted Date: 6/18/2013 5:59:54 AM | Location : United States







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