An S&L Provides a Loan with 15 Yearly Repayments of $10,000

question 43

Multiple Choice

An S&L provides a loan with 15 yearly repayments of $10,000 with the first payment beginning immediately.Which of the following amounts comes closest to the present value of the loan if the interest rate is 7%?

• A)$82,863
• B)$97,455
• C)$105,648
• D)$115,000
• E)Not enough information is given to determine the answer.

---

Definitions:

Profit Margin

A financial ratio that measures the percentage of profit a company earns from its total revenue.

Total Asset Turnover

Total asset turnover is a financial ratio that measures the efficiency of a company's use of its assets in generating sales revenue; it indicates how well a company can convert its assets into revenue.

Return on Total Assets

A financial ratio that measures a company's profitability in relation to its total assets, indicating how effectively a company uses its assets to generate profit.

Semiannual Interest Payment

A finance term referring to the practice of making interest payments twice a year on a loan or bond.