The correct answer is C. nominal/face value.
Interest is a fee paid by a borrower to a lender for the use of borrowed money. The interest rate is the percentage of the principal that is paid as interest each year. The principal is the amount of money that is borrowed. The interest is calculated on the principal, and the interest rate is applied to the principal to determine the amount of interest that is owed.
The nominal/face value is the amount of money that is borrowed. This is the amount that is used to calculate the interest. The market value is the current value of the loan. The fair value is the value of the loan that is agreed upon by the lender and the borrower.
The interest is always calculated on the nominal/face value. This is because the nominal/face value is the amount of money that is borrowed, and the interest is calculated on the amount of money that is borrowed. The market value and the fair value are not used to calculate the interest.