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Sagot :
A rate can cost you more on a loan when you carry a balance from one month to the next to are compound interest. Thus, option (a) is correct.
What is loan?
A loan is a sum of money that is lent to someone or something by a person, company, financial organization, or government. Mortgage, student, and personal loans are some numerous loan types.
When there is a fixed rate of interest for a set period of time, compound interest is the amount added to the principal and the total cumulative interest. The compound interest are the three divisions of half-yearly, quarterly, and monthly.
The compound interest rate is preferable if you're carrying over a loan balance from one month to the next because it permits your money to increase more quickly than the other rate.
Therefore, option (a) is correct.
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