Precompute

in installment lending, methods of charging interest whereby the total amount of annual interest either is deducted from the face amount of the loan at the time the loan proceeds are disbursed or is added to the total amount to be repaid in equal installments. In both cases, the effective rate to the borrower is higher than the stated annual rate used in the computation. “Truth in lending” laws require that the effective annual rate be expressed in Simple Interest terms.

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