A Loan of $20,000 Is to Be Paid Off with 2

question 113

Multiple Choice

A loan of $20,000 is to be paid off with 2 equal installments of X,occurring 3 months from now and 8 months from now.What is the value of X if r = 9 % and Merchant's Rule is used?

• A)$10,291.26
• B)$10,404.91
• C)$10,409.12
• D)$10,413.19

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Definitions:

Mortgage

A loan secured by the collateral of real estate property, where the borrower is obliged to pay back with a predetermined set of payments.

Trustee

A person or firm that holds and administers property or assets for the benefit of a third party.

Creditor

An individual or institution to whom money is owed.

Special Warranty Deed

A Special Warranty Deed is a type of deed in which the seller guarantees they have not impaired the title but only during their ownership.