Lucious Borrowed Money and Could Not Repay What He Owed

question 60

Multiple Choice

Lucious borrowed money and could not repay what he owed, so he borrowed money from Guavo to repay the old loan. Now, Lucious is working for Guavo to pay the new loan. In the meantime, Guavo provides shelter and food for Lucious and adds these expenses on to Lucious' debt. In truth, Lucious will never be able to work enough to pay off his growing debt to Guavo. This is an example of:

• A) Debt Bondage
• B) Contract Slavery
• C) Neocolonialism
• D) Chattel Slavery

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Definitions:

Compound-Interest

Interest calculated on the initial principal, which also includes all of the accumulated interest of previous periods of a deposit or loan.

Guaranteed Interest Rates

Interest rates promised to remain constant over a defined period, often associated with savings instruments like fixed deposits.

Maturity Value

The amount payable to an investor at the end of a fixed term investment.

Financial Planning

The process of creating strategies for managing finances to achieve personal financial goals.