Suppose You Borrowed $12,000 at an Annual Rate of 6

question 16

Multiple Choice

Suppose you borrowed $12,000 at an annual rate of 6 percent interest to buy a car and wish to repay it in five equal payments at the end of each of the next five years.Which of the following is the closest to the amount of each of these payments?

• A)$2,364
• B)$2,849
• C)$2,544
• D)$2,436

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Definitions:

Negotiable Instrument

A paper that assures the payout of a certain sum of money, either when requested or at a predetermined time, with the document specifying the person responsible for payment.

Holder In Due Course

A legal term for a person who has obtained a negotiable instrument in a valid manner and has certain protections against defenses and claims that could be asserted against the original party.

Certainty Of Payment

The assurance or guarantee that payment will be made, often a crucial consideration in financial transactions and agreements.

Negotiable Instrument

A written document guaranteeing the payment of a specific amount of money, either on demand or at a set time, with the payer named on the document.