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:

Service Charge Expense

Costs charged to customers for services provided, including fees for maintenance, support, or other service-related activities.

Accounts Receivable

Money owed to a business by its clients for goods or services provided on credit.

Visa and MasterCard

Global payment systems that facilitate transactions between merchants and card issuers to process credit and debit card payments.

Cash Sales

Transactions where payment is made in full using cash or electronic funds at the time of purchase.