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Questions and Answers
What is the Prime interest type?
What is the Prime interest type?
- The interest rate charged on overdue payments
- The rate at which a commercial bank charges all its customers
- The rate of interest set by banks for their best customers (correct)
- The interest rate offered to new customers by a bank
What is the Discounted interest type?
What is the Discounted interest type?
- Applied to overdue payments with an additional penalty
- Lower than the lender's standard variable rate, offered for a specific period as a promotional deal (correct)
- Fixed throughout the loan term, offered to high-risk customers
- Higher than the lender's standard variable rate, applied to long-term loans
What is Simple interest type?
What is Simple interest type?
- Only applicable to long-term loans such as mortgages
- Charged at different rates based on the customer's credit score
- Charged only on the initial amount borrowed, not on the accumulated interest (correct)
- Applied on both the principal amount and any accumulated interest
What is Compound interest type?
What is Compound interest type?
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What is Annual Percentage Rate (APR)?
What is Annual Percentage Rate (APR)?
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