Flores Company Borrowed $10,000 at 10% Interest for 5 Years

question 35

Multiple Choice

Flores Company borrowed $10,000 at 10% interest for 5 years. Which statement is true?

• A) Regardless of when the note is repaid, total interest over the loan period is the same.
• B) Interest expense is the same regardless of the compounding periods.
• C) The amount to be repaid is the same regardless of whether the principal is repaid $2,000 per year, or as a sum at the end of five years.
• D) Interest is less if simple interest is used than if compound interest is used.

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Definitions:

Mechanical

Pertaining to machinery or the working parts of a machine, often involving physical movements and forces.

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Wiring that is sized according to the American Wire Gauge standard, which determines the thickness of the wire based on a numerical scale.

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The electrical pathway that controls the lighting system on towed trailers, including tail lights and turn signals.

Gauge

An instrument or device for measuring the magnitude, amount, or contents of something, typically with a visual display of such information.