Payment of interest in advance

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Reference no: EM1346020

When looking at the differences as to why short term loan rates may vary, we cannot overlook 'Discount Rate' loans. These loans require the payment of interest in advance.

For these types of loans, would the interest rate be higher than if the interest was paid in arrears (at the end of the loan term)? Why?

 

Reference no: EM1346020

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