Jackson Has a Loan That Requires a $17,000 Lump Sum

question 24

Multiple Choice

Jackson has a loan that requires a $17,000 lump sum payment at the end of four years. The interest rate on the loan is 5%, compounded annually. How much did Jackson borrow today? (^{PV of $1}, ^{FV of $1}, ^{PVA of $1}, and ^{FVA of $1}) (Use appropriate factor(s) from the tables provided.)

• A) $15,343
• B) $11,504
• C) $16,150
• D) $13,986
• E) $13,600

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Definitions:

Personal Property

Movable property that is not attached to real estate, including vehicles, furniture, and personal belongings.

U.S. Government Bonds

Debt securities issued by the United States Department of the Treasury to fund federal government operations and obligations, considered low-risk investments.

Savings Account

A deposit account held at a financial institution that provides principal security and a modest interest rate.

CD

Compact Disc, a digital optical disc data storage format used for storing digital data, traditionally audio recordings.