Solve the Problem

question 253

Multiple Choice

Solve the problem. Use an annual percentage rate table if necessary.
-Reggie King took out a 36-month fixed installment loan of $20,000 to open a sporting goods store. He began making monthly payments of $631.33. Reggie's business does better than expected and
Instead of making his 18th 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)$10,584.43
• B)$10,634.48
• C)$11,265.81
• D)$10,713.08

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Definitions:

Debt Obligations

Financial commitments related to borrowed money or issued debt, requiring the debtor to repay the borrowed amount along with any agreed-upon interest.

Acquisition

The process of obtaining control of another corporation or asset through purchase or merger.

Section 1250 Property

Real property, typically buildings or structures, subject to a depreciation recapture tax if sold at a gain.

25% Bracket

A reference to a tax bracket where individuals or entities are taxed at a rate of 25% on their income within a certain range.