A College Student Receives an Interest-Free Loan of $8,250 from a Relative

question 132

Multiple Choice

A college student receives an interest-free loan of $8,250 from a relative. The student will repay $125 per month until the loan is paid off. After how many months will the student owe $5,000?

• A)after 2.6 months.
• B)after 26 months.
• C)after 40 months.
• D)after 28 months.
• E)after 23 months.

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Definitions:

Causation

A relationship between two events where one event is affected by the occurrence of the other event.

Limited Resources

Refers to the finite availability of goods and inputs, such as labor, raw materials, and capital, which are used to produce economic outputs.

Unlimited Wants

The economic concept that humans have insatiable desires for goods and services, which exceeds the resources available to satisfy them.

Individuals

Single human beings, considered separately from society or as distinct entities with personal interests and responsibilities.