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:

Concertgoer

An individual who attends a live performance, typically of music.

Price Ceiling

A legal maximum price that can be charged for a good or service, typically set by the government to prevent prices from becoming too high.

Supply and Demand

Fundamental economic concepts that determine the price of goods and services in a market, based on sellers' supplies and buyers' demands.

Persistent Shortage

A situation where the demand for a product or service consistently exceeds its supply over an extended period.