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:

Bulb

A rounded underground storage organ present in some plants, consisting of a short stem surrounded by fleshy scale leaves or leaf bases, functioning as a food reserve.

Underground Stem

Subterranean plant parts that function in storage of nutrients, vegetative reproduction, and survival from environmental conditions.

Modified Leaves

Leaves that have evolved to serve functions other than photosynthesis, such as protection or storage.

Rhizome

Stem that grows horizontally along or under the ground.