The market interest rate that equates the proceeds from a loan with the present value of the loan payments is called
A)implicit interest rate.
B)nominal interest rate.
C)imputed interest rate.
D)coupon interest.
E)both A and C.

Question

Quizplus · Accepted Answer

The terms "implicit interest rate" and "imputed interest rate" both refer to the interest rate that, when applied, equates the proceeds from a loan with the present value of the loan payments. This concept is used in finance to determine the effective interest rate of a loan or investment, taking into account the actual flow of cash.

The Market Interest Rate That Equates the Proceeds from a Loan