An S&L Provides a Loan with 15 Yearly Repayments of $8,000

question 60

Multiple Choice

An S&L provides a loan with 15 yearly repayments of $8,000 with the first payment beginning immediately. Which of the following amounts comes closest to the present value of the loan if the interest rate is 7%?

• A) $72,863.
• B) $77,964.
• C) $115,648.
• D) $120,000.

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Definitions:

Psychosexual Development

A Freudian theory highlighting the series of childhood stages where the libido (sexual energy) focuses on distinct erogenous zones.

Oral

Pertaining to the mouth; often used to describe the first psychosexual stage in Freudian psychology where the mouth is the primary source of pleasure.

Defence Mechanism

Psychological strategies employed by individuals to cope with reality and maintain self-image.

Regression

A defense mechanism leading an individual to revert back to a previous stage of development in their behavior, thoughts, or feelings.