(Solved): A bank customer is granted credit for a $2,000 loan at 10% to be repaid in 12 equal installments.1. ...

Expert Answer

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Net Proceeds for a Discount Loan: In a discount loan, the interest is deducted upfront from the loan amount, and the borrower receives the net proceeds. To calculate the net proceeds, we need to subtract the interest from the loan amount.
Loan Amount: $2,000 Interest Rate: 10% (as a decimal)
Interest = Loan Amount * Interest Rate Interest = $2,000 * 0.10 Interest = $200
Net Proceeds = Loan Amount - Interest Net Proceeds = $2,000 - $200 Net Proceeds = $1,800
Therefore, the net proceeds for a $2,000 loan at 10% as a discount loan would be $1,800

Net Proceeds for a Discount Loan: In a discount loan, the interest is deducted upfront from the loan amount, and the borrower receives the net proceeds. To calculate the net proceeds, we need to subtract the interest from the loan amount.