Slide 1Cost of a
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Often Finance Companies quote their interest rate as a flat interest rate
even though they use a
reducible interest rate.
always quote as a reducible interest rate.
18% flat may not be better than 25% reducible
depending on the time involved.
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Use the formula
Tricky Finance Company advertises a loan at 7% p.a. flat
for 5 years?
The Friendly Bank advertises a loan at 9% p.a. reducible
for 5 years?
Which is best?