: The actual interest rate in a bank discount is always higher than the stated discount rate because you are paying for the full amount while only using the "proceeds."
: Banks use this to buy notes from businesses early. bank discount
If you take a loan at a 6% bank discount for 90 days : Discount : Proceeds : : The actual interest rate in a bank
: The actual interest rate in a bank discount is always higher than the stated discount rate because you are paying for the full amount while only using the "proceeds."
: Banks use this to buy notes from businesses early.
If you take a loan at a 6% bank discount for 90 days : Discount : Proceeds :