Toronto Skaters Company Is Being Offered a One-Year Variable Rate

question 36

Multiple Choice

Toronto Skaters Company is being offered a one-year variable rate loan at a rate of prime + 0.75%.The loan is to be paid in quarterly installments and there are no other fees associated with it.The prime lending rate is currently 6% compounded quarterly.What is the effective annual cost of this loan?

• A)6%
• B)6.14%
• C)6.75%
• D)6.92%

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Definitions:

Prescription Medicines

Medications that can only be obtained with a doctor's written order and are eligible for certain tax exemptions when used for medical care.

Health Insurance Premiums

The amount paid, often on a monthly basis, for health insurance coverage.

Hospital Fees

Charges levied by hospitals for medical treatments, procedures, room occupancy, and other healthcare services provided to patients.

Medical Expense Deduction

An itemized deduction for taxpayers who have incurred significant medical and dental expenses exceeding a certain percentage of their adjusted gross income.