A Bank Is Negotiating a Loan

question 52

Multiple Choice

A bank is negotiating a loan. The loan can either be paid off as a lump sum of $100 000 at the end of five years, or as equal annual payments at the end of each of the next five years. If the interest rate on the loan is 10%, what annual payments should be made so that both forms of payment are equivalent?

• A)$19 588
• B)$12 000
• C)$16 380
• D)$20 000

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Definitions:

Employers

Individuals or entities that hire others to perform specific jobs or services, typically providing compensation in return.

Future Of Religion

Speculations or theories concerning the evolution, role, and function of religion in future societies and cultures.

Secularization Thesis

A theory that predicts religion would diminish in importance and influence due to modernization and rationalization.

Revised Secularization

A theory suggesting changes in society lead to a decline in the influence of religion, but not necessarily to its complete disappearance.