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In a discounted loan, how is the interest treated compared to a traditional loan?
  • a)
    Interest is added to the principal.
  • b)
    Interest is subtracted from the principal.
  • c)
    Interest is paid separately.
  • d)
    There is no interest in a discounted loan.
Correct answer is option 'B'. Can you explain this answer?
Most Upvoted Answer
In a discounted loan, how is the interest treated compared to a tradit...
In a discounted loan, the total interest due on the loan is subtracted from the principal at the start, so you receive the principal minus the interest you will have to pay on the loan.
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