Business Center Signs an Agreement with Credit Lending Inc

question 65

Multiple Choice

Business Center signs an agreement with Credit Lending Inc. to borrow $40,000 at 20 percent interest. Later, the state legislature passes a law lowering the maximum permissible rate of interest to 15 percent. The borrower's best argument for avoiding payment to the lender is that

• A)performance of the contract is commercially impracticable.
• B)payment of the loan would force the debtor into bankruptcy.
• C)the law has rendered performance of the contract illegal.
• D)the specific subject matter of the contract has been destroyed.

---

Definitions:

Average Tax Rate

The fraction of total income that is paid as taxes, calculated by dividing the total amount of tax paid by the total income.

Income

The money received by an individual or group for work, from investments, or from other sources, often used as an indicator of economic standing.

Marginal Tax Rate

The percentage of tax applied to your next dollar of income, indicating the tax bracket rate for each additional dollar earned.

Average Tax Rate

The proportion of total income that is paid as taxes, calculated by dividing the total taxes paid by the total income.