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(7.9) The interest rate expressed in terms of the interest payment made each period is called a interest rate or a interest rate. When interest rate is compounded more than once a year, the actual interest rate is than the quoted interest rate. The actual interest rate is called _. The aforementioned actual interest rate can be computed as follows: [1 + ( 1-1, where m is the number of times per year interest is compounded. When interest is compounded m times per year, the future value equals (7.10) The three basic types of loans are pure loans, interest-only loans, and amortized loans. A pure discount loan is a loan with which the borrower receives money today and repays a at some time in the future. The second type of loan repayment plan, called interest-only loans, calls for the borrower to pay each period and to repay the entire at some point in the future. An amortized loan requires that the borrower to repay parts of the loan amount over time; i.e. the borrower make periodic payment which include both and repayment of a portion of the Notice that the interest paid in this case (grows / declines) each period, because the loan balance is going down

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