Your Business Has Just Taken Out a 1-Year Installment Loan

question 100

Multiple Choice

Your business has just taken out a 1-year installment loan for $72,500 at a nominal rate of 11.0% but with equal end-of-month payments.What percentage of the 2nd monthly payment will go toward the repayment of principal?

• A) 73.67%
• B) 77.55%
• C) 81.63%
• D) 85.93%
• E) 90.45%

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Definitions:

Net Operating Income

A financial metric that calculates a company's profit after operating expenses are subtracted from its operating income.

Operating Assets

Assets used by a business in its day-to-day operations to generate income, including property, plant, and equipment but excluding investments and non-operational assets.

Return On Investment

A measure used to evaluate the efficiency or profitability of an investment compared to its cost.

Operating Assets

Resources owned by a business that are used in its day-to-day operations to generate revenue, such as machinery, buildings, and equipment.