Assuming You Were Charged Simple Interest of 5% on a Loan

question 60

Multiple Choice

Assuming you were charged simple interest of 5% on a loan of $1,000 that requires you to repay in two payments, one at the end of the first six months and one at the end of the second six months, total payments on the loan would be

• A) $1,037.50.
• B) $525.00.
• C) $512.50.
• D) $1,000.00.

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Definitions:

External Financing

Funding acquired from sources outside the company, such as loans, stock issues, or bonds.