The Annual Percentage Rate (APR) on a Single-Payment Loan of $1,000

question 10

Multiple Choice

The annual percentage rate (APR) on a single-payment loan of $1,000 at a simple interest rate of 12% is:

• A) 10%.
• B) 12%.
• C) 15%.
• D) 18%.
• E) 24%.

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Definitions:

Yield To Maturity

Yield to maturity is the total return anticipated on a bond if the bond is held until its maturity date, accounting for its current market price, par value, coupon interest rate, and time to maturity.

Coupon Rate

The coupon rate is the annual interest rate paid on a bond, expressed as a percentage of the face value.

Yield To Maturity

The total return anticipated on a bond if the bond is held until its maturity date, factoring in its current market price, par value, interest payments, and time to maturity.

Current Yield

The yearly earnings from interest or dividends, when divided by the security's current market price.