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.

---

Definitions:

Iconic Memory

The visual sensory memory register pertaining to the visual domain and a fast-decaying store of visual information.

Sensory Memory

The shortest-term element of memory, allowing the retention of impressions of sensory information after the original stimuli have ended.

Working Memory

A mental system of restricted capability accountable for momentarily retaining data for processing purposes.

Overextension

A language development error wherein a child applies a word too broadly to objects that do not fit the word's meaning.