Use the Present Value and Future Value Tables Included in Appendix

question 20

Multiple Choice

Use the present value and future value tables included in Appendix 8 and on the textbook companion website.
-Assuming the straight-line method of amortization is used, the average yearly interest expense on a $450,000, 11 percent, 20-year bond issued at 106 would be

• A) $48,150
• B) $49,500
• C) $50,850
• D) $53,100

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Definitions:

Federal Gasoline Tax

A tax imposed by the federal government on the sale of gasoline, used primarily to fund transportation projects.

General Equilibrium

A state in which all markets in an economy are in simultaneous equilibrium, with supply equaling demand in each market.

Normal Good

A good for which demand increases as the income of the consumer increases, showing a positive relationship between income and demand.

Complements

Goods that are consumed together because the use or enjoyment of one good enhances the use or enjoyment of the other.