If a Person Borrows $2,000 at 5% Interest and Never

question 293

Multiple Choice

If a person borrows $2,000 at 5% interest and never makes any payments, how much will the loan balance be after five years?

• A) $2,250
• B) $2,500
• C) $2,255.55
• D) $2,552.56

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Definitions:

Assignee

An individual or entity to which rights or interests are transferred by another.

Assignment

The transfer of one’s rights or obligations under a contract to another party.

Delegation

The act of transferring authority or tasks from one individual or group to another while retaining ultimate responsibility.

Incidental Beneficiary

An Incidental Beneficiary is an individual or party that indirectly benefits from a contract between two other parties, though not intended as the primary beneficiary of the contract.