3. A. Explain the difference between Installment Loan and Mortgage Loan. B. You are offered a simple interest of 8 % on a sum of OMR 20,000 for 4 years and at a compound interest rate of 6% per annum, compounded annually. Which of the two options is beneficial for you? (Show your Workings).

3. A. Explain the difference between Installment Loan and Mortgage Loan. B. You are offered a simple interest of 8 % on a sum of OMR 20,000 for 4 years and at a compound interest rate of 6% per annum, compounded annually. Which of the two options is beneficial for you? (Show your Workings).

Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)

7th Edition

ISBN:9780357033609

Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Chapter7: Using Consumer Loans

Section: Chapter Questions

Problem 7FPE: Calculating interest and APR of installment loan. Assuming that interest is the only finance charge,...

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Concept explainers

Amortized Loans

The term "amortization" refers to spreading the value of a loan or a debt over a series of regular payments or installments comprising of both the principal and interest amount. It generally involves the process where in the value of a loan or an intangible asset is written down over its maturity period.

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3. A. Explain the difference between Installment Loan and Mortgage Loan.
B. You are offered a simple interest of 8 % on a sum of OMR 20,000 for 4 years and at a
compound interest rate of 6% per annum, compounded annually. Which of the two options
is beneficial for you? (Show your Workings).

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