XYZ Corporation Borrowed $100,000 for Six Months from the Bank

question 8

Multiple Choice

XYZ Corporation borrowed $100,000 for six months from the bank. The rate is prime plus 2 percent. The prime rate was 8.5 percent at the beginning of the loan and changed to 9 percent after two months. This was the only change. How much interest must XYZ corporation pay?

• A) $18,212
• B) $2,476
• C) $5,417
• D) $21,500

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Definitions:

Business Ethics

The study of appropriate business policies and practices regarding potentially controversial issues such as corporate governance, insider trading, bribery, discrimination, corporate social responsibility, and fiduciary responsibilities.

Federal Sentencing Guidelines

A set of standards that outline the recommended punishment for individuals and organizations convicted of federal crimes in the United States.

Compliance Program

A formalized system within organizations that helps ensure adherence to laws, regulations, and company policies.

Trust

The reliance on the integrity, strength, ability, surety, etc., of a person or thing; confidence.