What Annual Rate of Return Is Implied on a $5,000

question 51

Multiple Choice

What annual rate of return is implied on a $5,000 loan taken next year when $7,700 must be repaid in year 8?

• A) 6.36 percent
• B) 7.12 percent
• C) 8.54 percent
• D) 11.62 percent

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Definitions:

Trustee

A person who is entrusted with the management and control of another’s property or the rights associated with that property.

Federal Bankruptcy Law

A collection of laws outlined in the U.S. Bankruptcy Code that governs the process by which individuals, couples, and businesses may declare bankruptcy in the United States.

Bankruptcy Code

The set of federal statutes that govern the process of legal declaration of a person or corporation's inability to pay debts.

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Financial support paid by one former spouse to another after divorce or separation, intended to provide for the recipient's needs.