A Bank Offers a Home Buyer a 20-Year Loan at 8

question 19

Multiple Choice

A bank offers a home buyer a 20-year loan at 8% per year. If the home buyer borrows $130,000 from the bank, how much must be repaid every year?

• A) $15,888.95
• B) $18,537.11
• C) $21,185.26
• D) $13,240.79

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Definitions:

Closing Inventories

The total value of unsold goods and materials that a company holds at the end of its financial year, which is recorded as a current asset in the balance sheet.

Product Obsolescence

Occurs when a product becomes outdated and is no longer needed or wanted by consumers, often due to technological advances.

Physical Deterioration

The gradual loss of an asset's functional utility or value due to wear and tear or aging.

Material Wastage

The unwanted or unusable materials produced during a manufacturing or consumption process. It reflects inefficiency and can impact operational costs.