You Just Borrowed $12,750 from the Bank to Use in Your

question 70

Multiple Choice

You just borrowed $12,750 from the bank to use in your business. The loan terms require you to pay the interest annually with the entire principle due in six years. The interest rate is 8.95%. How much
Will you pay to the bank in year five of the loan?

• A) $1,106.67
• B) $1,141.13
• C) $1,203.17
• D) $1,244.98
• E) $1,424.58

---

Definitions:

Dividends

Dividends are a portion of a company's earnings distributed to its shareholders as a reward for their investment in the company.

Expense

Money spent or costs incurred by a business in the course of generating revenues.

Increase Stockholders' Equity

Refers to the growth in the equity portion of a company's balance sheet, signifying a rise in the net assets owned by shareholders.

Transactions

Financial events or exchanges that affect a company's assets, liabilities, or equity, and must be recorded in the accounting records.