Calculating interest using the _____ will result in the highest APR on a single-payment loan.
A)double declining balance method
B)discount method
C)average loan balance method
D)simple interest method
E)add-on method

Question

Calculating interest using the _____ will result in the highest APR on a single-payment loan.
A)double declining balance method
B)discount method
C)average loan balance method
D)simple interest method
E)add-on method

Quizplus · Accepted Answer

The discount method results in the highest APR because the interest is deducted from the principal before the borrower receives the loan, effectively increasing the cost of borrowing.

Calculating Interest Using the _____ Will Result in the Highest APR