Sam Has a Loan That Requires a Single Payment of $4,000

question 48

Multiple Choice

Sam has a loan that requires a single payment of $4,000 at the end of three years.The loan's interest rate is 6%,compounded semiannually.How much did Sam borrow?

• A) $3,358.40
• B) $4,000.00
• C) $3,660.40
• D) $4,776.40
• E) $3,350.00

---

Definitions:

Collection Process

The method by which a company pursues payment on outstanding invoices from customers, including sending reminders, making calls, or taking legal action.

Credit Standards

The set of criteria that lenders use to determine the creditworthiness of borrowers and the terms under which credit will be extended.

Credit Policy

The guidelines a company follows in determining credit terms for its customers, including terms of payment and credit limits.

Collection Policy

A set of procedures a company uses to manage the collection of amounts due from its customers.