Add-on Interest

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  • 1 Sections
  • 1 Types
August 25, 2024 4 min read Definitions
Add-On Interest: Interest Added to Principal of a Loan
Finance Banking Investments Add-on Interest Loans Annual Percentage Rate (APR) Principal Federal Law
Add-On Interest involves computing interest on the original amount borrowed, leading to a stated rate much lower than the Annual Percentage Rate (APR).
Read more about Add-On Interest: Interest Added to Principal of a Loan.
August 25, 2024 3 min read Definitions
Rule of 78s: Unearned Interest Calculation Method for Installment Loans
Finance Banking Interest Calculation Installment Loans Add-on Interest Prepayment Unearned Interest
The Rule of 78s is a method used to calculate the interest charged on installment loans with add-on interest. It is based on the sum of the digits from 1 to 12 for a 12-month loan.
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August 24, 2024 3 min read Definitions
Add-On Interest: Definition, Formula, and Cost Analysis Compared to Simple Interest
Finance Banking Add-on Interest Loan Calculation Interest Formula Simple Interest Borrower Costs
Explore the definition of add-on interest, learn the formula used, and understand the costs involved compared to simple interest. Deep dive into the differences and implications for borrowers.
Read more about Add-On Interest: Definition, Formula, and Cost Analysis Compared to Simple Interest.

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