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Loans and Interest

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A) Which is preferable, a loan with a lower present value or a loan with a lower periodic installment? Why?

b) Why is more interest paid at the beginning of a loan period than at the end?

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Solution Summary

This solution examines which is preferable, a loan with a lower present value or a loan with a lower periodic installment and why. It also discusses why more interest is paid at the beginning of a loan period than at the end.

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