A Bank Offers a Loan That Will Requires You to Pay

question 56

Multiple Choice

A bank offers a loan that will requires you to pay 6% interest compounded monthly.Which of the following is closest to the EAR charged by the bank?

• A)5.84%
• B)6.00%
• C)6.17%
• D)72.00%

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Definitions:

No-Par Value Stock

Shares issued without a nominal or face value, where the market value of the shares is determined by the price investors are willing to pay.

Stated Value Stock

Stock issued with a nominal value assigned by the board of directors, which is not based on market value but affects the accounting equity.

Cost Method

An accounting method where investments are recorded at their acquisition cost, adjusting for any additional costs or impairments.

Market Value

The prevailing market price for acquiring or disposing of an asset or service.