Anya Finally Decides That She Will Give Her Cousin,Zen,the Loan

question 28

Multiple Choice

Anya finally decides that she will give her cousin,Zen,the loan he requested. He is expected to pay Anya $12,500 each year for the next 5 years,starting at the end of this year.The loan interest rate at the bank is 5% but because he is family,she will only charge him half of this interest rate.What is the current value of this loan,today?

• A) $58,072.86
• B) $500,000
• C) $62,500
• D) $54,118.46
• E) $55,240.89

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Definitions:

Average Total Cost

The total cost of production divided by the quantity of output produced, indicating the cost per unit of output.

Range of Output

The spectrum or variety of product quantities that a production process or industry can produce, from minimum to maximum.

Mixers

Electronic or mechanical devices used to combine, blend, or process ingredients or substances in various industries, or an event primarily intended to encourage socializing.

Average Total Cost

The total cost of producing a certain amount of a good, divided by the quantity of the good produced.