What Is the Yield to Maturity on a Simple Loan

question 51

Multiple Choice

What is the yield to maturity on a simple loan that requires payment of $500 plus $30 in interest one year from now?

• A) 5.3%
• B) 6%
• C) 6.38%
• D) Not enough information has been provided to determine the answer.

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Definitions:

Problem Solving

The process of identifying a problem, determining the best solution among alternatives, and implementing that solution effectively.

Creativity-Enhancing

Refers to methods or practices aimed at boosting the ability to generate novel and valuable ideas.

Flexible Thinking

The ability to quickly adapt one's thinking or approach in response to changing circumstances or new information.

Convergent Thinking

A cognitive process in which a person focuses on finding a single, well-established answer to a problem.