A Company That Has Its Loans Serviced, for Whatever Reason

question 226

Multiple Choice

A company that has its loans serviced, for whatever reason, is usually charged a servicer's fee. This fee is usually expressed:

• A) As an annual fraction of a percentage of each interest payment
• B) As an annual fraction of a percent of the principal balance of the loans or based on a percentage of each interest payment
• C) As a monthly fraction of a percent of the principal balance of the loans or based on a percentage of each interest payment
• D) As a monthly fraction of a percentage of each interest payment

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Definitions:

Federal Unemployment Taxes

Taxes paid by employers to fund the federal government's oversight of the state unemployment insurance programs.

Gross Pay

The total earnings of an employee for a payroll period.

Discounted Note

A type of debt instrument that is sold for less than its face value and pays its face value at maturity, reflecting the discount as interest.

Face Value

The nominal or dollar value printed on a financial instrument, such as a bond or stock certificate, representing its value at issuance.