A Homeowner Has Five Years of Monthly Payments of $1400

question 18

Multiple Choice

A homeowner has five years of monthly payments of $1400 before she has paid off her house. If the interest rate is 6% APR, what is the remaining balance on her loan?

• A) $57,933
• B) $86,899
• C) $72,416
• D) $101,382

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Definitions:

Deadweight Loss

The loss of economic efficiency that can occur when the equilibrium for a good or service is not achieved or is distorted.

Equilibrium

An economic situation in which no individual would be better off doing something different.

Perfectly Inelastic

A situation where the demand or supply for a good is completely unresponsive to changes in price.

Deadweight Loss

A loss of economic efficiency that can occur when the optimal allocation of resources is not achieved, often due to market failures or government interventions.