You've Worked Out a Line of Credit Arrangement That Allows

question 38

Multiple Choice

You've worked out a line of credit arrangement that allows you to borrow up to $2.1 million at any time.The interest rate is .72 percent per month.In addition, 3 percent of the amount you borrow must be deposited in a non-interest-bearing account.Assume your lender uses compound interest and that you need $1.3 million today which you will repay in five months.How much interest will you pay?

• A)$79,069
• B)$48,947
• C)$42,103
• D)$47,479
• E)$48,886

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Definitions:

Unitary Systems

A form of government where a single central government holds the power, with any regional or local governments deriving authority from it.

Dual Federalism

Refers to a political arrangement in which power is divided between the federal and state governments in clearly defined terms, with state governments exercising those powers accorded to them without interference from the federal government.

Supremacy Clause

A clause in the United States Constitution stating that federal law is the supreme law of the land, taking precedence over state laws and constitutions when there is conflict.

Devolution Theory

The idea or process of transferring powers from a central government to local or regional administrations, often to promote decentralization.