Use the Information for the Question(s) Below

question 67

Multiple Choice

Use the information for the question(s) below.
Two years ago you purchased a new SUV. You financed your SUV for 60 months (with payments made at the end of the month) with a loan at 5.9% APR. Your monthly payments are $617.16 and you have just made your 24th monthly payment on your SUV.
-Amortizing loans are the loans that have monthly payments and are quoted in terms of ________ with ________ compounding.

• A) an effective rate; annual
• B) an equivalent rate; annual
• C) an annual percentage rate; monthly
• D) a nominal rate; semiannual

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Definitions:

New Store

A newly established retail outlet or branch of a business that has recently started operations.

Financial Management

The practice of managing a firm's financial operations to achieve financial goals and profitability.

CFO

Chief Financial Officer, the senior executive responsible for managing the financial actions of a company.

Purely Cash Compensation

Payment made in the form of physical currency or through direct deposit to a bank account, without any non-cash benefits.