Solve the Problem

question 32

Multiple Choice

Solve the problem. Use an annual percentage rate table if necessary.
-Reggie King took out a 36-month fixed installment loan of $17,000 to open a sporting goods store. He began making monthly payments of $536.63. Reggieʹs business does better than expected and Instead of making his 30th payment, Reggie decides to repay his loan in full. What is the total Amount due to pay off the balance (use the actuarial method) ?

• A) $3678.20
• B) $3139.63
• C) $3701.43
• D) $4214.84

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Definitions:

Isocost Curve

An isocost curve represents all combinations of inputs which result in the same total cost for a firm, essentially showing the trade-offs between different types of inputs while maintaining the same budget.

Wage Rate

The amount of money paid to an employee per unit of time worked, often expressed per hour or year.

Rental Cost

The price paid for the temporary use of a good, service, or property owned by another party.

Optimal Combination

An optimal combination refers to the selection of goods, services, or inputs that provides the highest satisfaction or return for a given cost or the lowest cost for a given level of satisfaction or output.