Question

What is the primary difference between a note with interest in the face and a note...

What is the primary difference between a note with interest in the face and a note with interest stated separately?

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Answer #1

The primary difference between a note with interest in the face and a note with interest stated separately is that in case of a note with interest in the face, the stated interest rate and effective interest rate are different whereas, in case of a note with interest stated separately, the stated interest rate and effective interest rate are same. The effective interest rate is generally higher than the stated interest rate in case of a note with interest in the face.

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