You Want to Borrow $47,170 from Your Local Bank to Buy

question 100

Multiple Choice

You want to borrow $47,170 from your local bank to buy a new sailboat.You can afford to make monthly payments of $1,160,but no more.Assume monthly compounding.What is the highest rate you can afford on a 48-month APR loan?

• A)8.38 percent
• B)8.67 percent
• C)8.82 percent
• D)9.01 percent
• E)9.18 percent

---

Definitions:

Retained Earnings

These are the profits that a company has decided to keep or reinvest in the business rather than distribute to shareholders as dividends.

Analyzing Noncash Accounts

Examining accounts that involve transactions not involving cash, such as depreciation, amortization, and accrued expenses.

Outflow of Cash

Financial transactions that result in the expenditure of cash from a business, such as payments for expenses, investing activities, and financing activities.

Discarding an Asset

involves removing an asset from the company's balance sheet due to it being obsolete, no longer usable, or not worth repairing.