Walter Borrows $10,000 from His Mother

question 51

Multiple Choice

Walter borrows $10,000 from his mother. He will repay her $2,000 at the end of each of the next four years and the balance at the end of the fifth year. If the interest rate is 12%, what is the amount to be paid at the end of the fifth year?

• A) $3,926.00
• B) $6,924.16
• C) $5,869.65
• D) $2,000.00

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Definitions:

Last Year's Margin

The difference between sales revenue and the cost of goods sold in the previous fiscal year, often used as a benchmark for financial performance.

Unfavorable Effect

Occurs when actual costs exceed budgeted costs, or actual revenues are less than expected, negatively impacting financial performance.

Trained Workers

Personnel who have received specific training to perform their job duties effectively and efficiently.

Variances

Differences between planned or standard costs and actual costs, analyzed to understand and manage costs within financial planning.