JK's Is Borrowing $132,000 for Three Years at an APR

question 115

Multiple Choice

JK's is borrowing $132,000 for three years at an APR of 7.6 percent.The loan calls for the principal balance to be reduced by equal amounts over the life of the loan.Interest is to be paid in full each year.The payments are to be made annually at the end of each year.How much will be paid in interest over the life of this loan?

• A)$10,032
• B)$30,096
• C)$12,840
• D)$20,064
• E)$18,667

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Definitions:

Consolidated Revenues

The total revenues recognized from all sources, including subsidiaries, by a parent company during a reporting period, after the elimination of any inter-company transactions.

Inventory Purchase Price

The amount paid to acquire inventory before any discounts or allowances.

Outstanding Voting

Refers to shares of a corporation that are currently owned by investors and have voting rights at shareholder meetings.

Intra-entity Gross Profit

The profit generated from transactions conducted within different parts of the same company.