Jason Has a Loan That Requires a Single Payment of $4,000

question 23

Multiple Choice

Jason has a loan that requires a single payment of $4,000 at the end of 3 years.The loan's interest rate is 6%,compounded semiannually.How much did Jason borrow? (PV of $1,FV of $1,PVA of $1,and FVA of $1) $\bold{\text{(Use appropriate factor(s) from the tables provided.) }}$

• A)$3,358.40
• B)$4,000.00
• C)$3,660.40
• D)$4,776.40
• E)$3,350.00

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Definitions:

Par Preferred Stock

A type of preferred stock that has a nominal face value and is entitled to dividends before any dividends can be issued to common stockholders.

Retained Earnings

Profits that a company has kept or retained rather than distributing to shareholders as dividends.

Net Income

The net income of a business once all costs, taxes, and expenses are deducted from its total revenue.

Dividend

A dividend is a payment made by a corporation to its shareholders, usually as a distribution of profits.