CECL Models Explained
Illustration 4 - Effective Interest Rates A car loan of $60,000 repayable over 5 years at a flat rate of 2.6% p.a. has an EIR of 5.092% p.a. Under the monthly rest method of interest computation, the quoted rate of interest is the effective rate, as interest is computed based on the reduced balance every month. ................
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