Ines Corporation Bought a New Machine and Agreed to Pay

question 69

Multiple Choice

Ines Corporation bought a new machine and agreed to pay for it in equal annual instalments of $10,000 at the end of each of the next four years.The payments include both interest and principal.The rate of interest for this transaction is 8%.The total amount of interest that Ines will pay is closest to?

• A)$2,963
• B)$3,200
• C)$6,879
• D)The interest cost can't be determined.

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Definitions:

Equitable Assignment

The transfer of future rights to benefits in a contract to another party, recognized by equity courts.

Novation

The process of replacing an existing obligation with a new one, effectively transferring the rights and duties to another party.

Breach of Contract

The act of not executing any part of a contract, either written or oral, lacking a legitimate legal rationale.

Non Est Factum

A legal defense claiming a person signed a document without understanding its nature due to a fundamental mistake.