Economics · Banking and Accounting
Which banking product is most likely to use the Calculation of Interest Using Products/Balances method (also known as the Product Method) for interest determination?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1A home loan where the EMI is calculated based on the reducing balance method.
- 2A bank overdraft (OD) or cash credit (CC) facility where the outstanding balance fluctuates daily.✓
- 3A single-payment personal loan where simple interest is charged annually on the original principal.
- 4A 5-year fixed deposit where interest is compounded quarterly.
Correct answer
A bank overdraft (OD) or cash credit (CC) facility where the outstanding balance fluctuates daily.
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