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The Allocation of Monthly Payments to Principal and Interest; A Caveat for Consumers
Author(s) -
COLLINS ROBERT A.
Publication year - 1981
Publication title -
journal of consumer affairs
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.582
H-Index - 62
eISSN - 1745-6606
pISSN - 0022-0078
DOI - 10.1111/j.1745-6606.1981.tb00716.x
Subject(s) - principal (computer security) , interest rate , payment , economics , actuarial science , business , monetary economics , finance , computer science , operating system
The true cost of credit depends not only on the amount borrowed and the interest rate, but also the manner in which monthly interest charges are calculated. Changes in this calculation method that appear to be minor can produce some surprising changes in the cost of credit. These changes, which do not have to be disclosed on some types of loans, are worth watching for when shopping for credit.