If the Price of a Hot Dog Is $2 and the Price

question 115

Multiple Choice

If the price of a hot dog is $2 and the price of a hamburger is $4, then the

• A) relative price of a hot dog is 1/2 of a hamburger per hot dog.
• B) money price of a hot dog is 2 hamburgers per hot dog.
• C) relative price of a hamburger is 1/2 of a hot dog per hamburger.
• D) money price of a hamburger is 2 hot dogs per hamburger.

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Definitions:

Amortized Loan

a loan in which the principal and interest are paid down over time through fixed monthly payments.

Effective Rate

The effective rate, often referred to as the effective annual rate, is the interest rate on a loan or financial product re-compounded on a yearly basis.

Amortization Schedule

An amortization schedule is a table detailing each periodic payment on an amortizing loan, illustrating how the principal amount is reduced over time.

Effective Rate

The actual interest rate an individual pays on a loan or earns on an investment, accounting for compounding.