A Foreign Exchange Student Bought a Used Car for $10,000

question 206

Multiple Choice

A foreign exchange student bought a used car for $10,000 and resold it one year later for $6,500. Insurance, license, and operating costs for the year were $1,500. What was his economic cost of owning and operating the car for the year if the market rate of interest was 10 percent?

• A) $3,500
• B) $5,000
• C) $6,000
• D) $8,500

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Definitions:

Navajos

are a Native American people of the Southwestern United States, known for their rich cultural traditions, art, especially weaving, and their history of resilience and sovereignty.

Union Troops

Soldiers who fought for the Northern states during the American Civil War.

New Mexico Territory

The New Mexico Territory was an organized incorporated territory of the United States that existed from 1850 until 1912, when the remaining portion of the territory was admitted as the state of New Mexico.

Union Forces

The army and military resources of the United States (the North) during the American Civil War, battling against the seceding Confederate states.