Use the Information for the Question(s)below

question 14

Multiple Choice

Use the information for the question(s) below.
Two years ago,you purchased a new SUV.You financed your SUV for 60 months (with payments made at the end of the month) with a loan at 5.9% APR.You monthly payments are $617.16 and you have just made your 24th monthly payment on your SUV.
-Assuming that you have made all of the first 24 payments on time,then the outstanding principal balance on your SUV loan is closest to:

• A)$14,808.
• B)$20,300.
• C)$22,212.
• D)$32,000.

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Definitions:

Double-declining-balance Method

An accelerated depreciation method that doubles the normal depreciation rate, allowing for more depreciation expense in the earlier years of an asset's life.

Straight-line Method

A technique for determining the depreciation of an asset that presumes the asset depreciates by a consistent amount annually throughout its expected lifespan.

Net Income

The amount of earnings left over for a business after it has paid out all expenses, including taxes, interest, and operating expenses.

Correcting Entry

An entry made in accounting records to correct a mistake made in a previous recording.