Tae Takes Out a Loan for $5000,to Be Paid Back

question 36

Multiple Choice

Tae takes out a loan for $5000,to be paid back with monthly payments of $199 for as long as is needed.The first payment of $199 is due exactly 6-months after the loan is taken out.Tae also plans to increase the size of the final payment (that is,he plans to make a balloon payment,not a drop payment) .If the interest rate on the loan is j₁₂ = 12%,how many payments are needed?

• A)28
• B)29
• C)30
• D)31

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Definitions:

Productivity

The efficiency at which individuals, companies, or economies produce goods and services, usually measured as output per unit of input.

Economic Growth

An increase in the amount of goods and services produced in an economy over a period of time.

Investment

Investment refers to the allocation of resources, usually financial, in order to generate income or profit, including the purchase of assets with the expectation that it will generate payoff in the future.

Advanced Economy

A term used to describe a country with a very high level of economic development, characterized by high-income levels, diversified economic structures, and stable financial markets.