The State of Transas Has Set a Maximum Interest Rate

question 63

Multiple Choice

The state of Transas has set a maximum interest rate of 12 percent on loans.Matt borrows $10,000 from Tony to pay off a gambling debt.Both are residents of Transas.They sign a contract which states that Matt would have to pay $15,000 as interest in one year to pay off the loan.Later Matt finds out the state usury limit and sues Tony.What is the nature of the contract between Matt and Tony?

• A) It is illegal as it violates gambling statutes.
• B) It is legal as both parties were competent when the contract was signed.
• C) The contract is void as it violates usury laws.
• D) The contract is void as it is a contract to commit a crime.

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Definitions:

AutoNumber

AutoNumber is a feature in database and spreadsheet software that automatically generates a unique numerical identifier for each new record or row added.

Sequential

Pertaining to or forming a sequence, where items follow one another in a logical order or fixed series.

ValueIncrement

A process or method by which a numerical value is increased by a specified amount.

Incremental

Pertaining to a process or increase characterized by gradual, stepwise changes or additions.