If Your Bank Gives You a $2,000 Loan at 8

Multiple Choice

If your bank gives you a $2,000 loan at 8% per year, but deducts the interest in advance, is 8% the "real" rate of interest that you will pay?

A) There is not enough information to answer this question accurately.
B) Yes.
C) No. The interest rate is actually higher than 8 percent.
D) No. The interest rate is actually lower than 8 percent.