You Agree to Lend a Friend $15,000 for a Year

question 5

Multiple Choice

You agree to lend a friend $15,000 for a year at an annual interest rate of 20%. At the end of the year your friend must pay you ________ in interest.

• A) $133
• B) $750
• C) $1,500
• D) $3,000

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Definitions:

Consequential Damages

Losses suffered as a consequence of a breach of contract, not directly caused by the breach but resulting from the specific circumstances of the affected party.

Liquidated Damages

A contractual provision that specifies a predetermined amount of money that must be paid as damages in the event of a breach of contract.

Anticipatory Repudiation

A party's declaration to not fulfill their obligations under a contract before the performance is due.

Total Breach

A complete failure to perform or fulfill contractual obligations, resulting in the termination of the contract.