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Unformatted text preview: Quick Quiz What is a pure discount loan? What is a good example of a pure discount loan? (Slide 5.72) What is an amortized loan? What is a good example of an amortized loan? (Slide 5.73) 5-1 Pure Discount Loans Treasury bills are excellent examples of pure discount loans. Principal amount is repaid at some future date No periodic interest payments Return to Quick Quiz 5-2 Amortized Loan with Fixed Payment
Example Each payment covers the interest expense plus reduces principal Return to Quick Quiz 5-3 ...
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- Spring '11