Use Estimation to Select the Best Response

question 113

Multiple Choice

Use estimation to select the best response. Do not calculate. A $147,000 30-year loan at 10% + 1.5 points + $200 would have a comparison rate of __________.

• A) 10%
• B) 1.5%
• C) less than 1.5%
• D) more than 10%
• E) less than 10% but more than 1.5%

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Definitions:

Cash

Money in the form of coins and banknotes; the most liquid form of assets a company has.

Journalizing

The process of recording transactions in a company's journal before they are posted to the general ledger.

Posting Process

The act of transferring entries from the journal to the respective ledger accounts to keep financial records accurate and up-to-date.

Wrong Amount

Errors in financial transactions that result in the recording of inaccurate figures in accounting systems.