If the Description of Interest in the Instrument Does Not

question 40

Multiple Choice

If the description of interest in the instrument does not allow the amount of interest to be ascertained,then interest is payable at the:

• A)variable rate.
• B)judgment rate.
• C)order rate.
• D)fixed rate.

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Definitions:

Compounded Annually

A method of calculating interest where the interest earned each year is added to the principal, thereby earning interest in subsequent years.

Received

The action of obtaining or accepting something, such as goods, payments, or services.

Fiscal Year

A one-year period that companies and governments use for financial reporting and budgeting that does not necessarily align with the calendar year.