You Need Some Money Today and the Only Friend You

question 19

Multiple Choice

You need some money today and the only friend you have that has any is your miserly friend. He agrees to loan you the money you need, if you make payments of $25 a month for the next six months. In keeping with his reputation, he requires that the first payment be paid today. He also charges you 1.5 percent interest per month. How much money are you borrowing?

• A)$134.09
• B)$138.22
• C)$139.50
• D)$142.68
• E)$144.57

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Definitions:

Mutual Agency

A legal principle in partnerships where each partner has the authority to act on behalf of, and bind, the partnership in contractual agreements.

Unlimited Liability

Partners may be personally liable for debts of the partnership.

Limited Risk

Financial exposure that is knowingly restricted or minimized in investments or business operations.

Articles of Partnership

A legal document that specifies the rights, duties, and obligations of each partner participating in a partnership business.