You Have Agreed to a $40,000 Fixed-Rate Loan from Chase

question 34

Multiple Choice

You have agreed to a $40,000 fixed-rate loan from Chase Bank today and promise to repay the loan with 36 equal monthly payments at an APR of 5.50%.How large are your monthly payments? Use a financial calculator to determine your answer.

• A)$1,207.84
• B)$1,358.21
• C)$1,532.45
• D)$1,690.71

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Definitions:

Explicit Costs

Direct, out-of-pocket expenses paid by firms for inputs to production, such as wages, rent, and materials, as opposed to implicit costs which are not directly paid out in cash.

Implicit Costs

The opportunity costs that are not directly paid for or incurred during the production of a good or service.

Average Total Cost

The complete expenditure of manufacturing (incorporating steady and fluctuating expenses) divided by the aggregate volume of goods produced.

Output

The total quantity of goods or services produced by a company, sector, or economy within a given period.