Suppose You Borrowed $15,000 at a Rate of 8

question 95

Multiple Choice

Suppose you borrowed $15,000 at a rate of 8.5% and must repay it in 5 equal installments at the end of each of the next 5 years.By how much would you reduce the amount you owe in the first year?

• A) $2,404.91
• B) $2,531.49
• C) $2,658.06
• D) $2,790.96
• E) $2,930.51

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Definitions:

Par Value

The face value of a bond or stock as stated on the certificate, which is the minimum amount the security can be sold for upon initial offering.

Stated Value

The amount per share assigned by the board of directors to no-par value stock.

Per Share Value

The financial value of a single share of a company's stock, representing a fraction of the corporation's assets and earnings per share.

Market Value

The prevailing market rate at which a service or asset is available for purchase or sale.