May Finances a Refrigerator for $1,250 by Taking Out an Installment

question 18

Multiple Choice

May finances a refrigerator for $1,250 by taking out an installment loan for 48 months. The payments are $38.54 per month and the total finance charge is $599.92. After 30 months, May decided to pay off the loan. After calculating the finance charge rebate (using the "Rule-of-78") , find her loan payoff.

• A) $896.96
• B) $606.49
• C) $425.04
• D) $824.96

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Definitions:

Hierarchy of Authority

A system within organizations where power and responsibilities are ranked from the top (highest authority) to the bottom (lowest authority).

Mechanistic Design

A structure in organizations characterized by strict procedures, rigid divisions of labor, and centralized decision making.

Formal Coordination

A process where organizational activities are aligned and managed through explicit and official policies, procedures, and structures.

Specific Tasks

Distinct activities or assignments that are designed to achieve a particular objective within a set timeframe.