Sam Has a Loan That Requires a Single Payment of $4,000

question 48

Multiple Choice

Sam has a loan that requires a single payment of $4,000 at the end of three years.The loan's interest rate is 6%,compounded semiannually.How much did Sam borrow?

• A) $3,358.40
• B) $4,000.00
• C) $3,660.40
• D) $4,776.40
• E) $3,350.00

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Definitions:

Perpetual Inventory System

An inventory tracking system where updates are made continuously to reflect sales, purchases, and returns in real-time.

LIFO

Last-In, First-Out, an inventory valuation method where the most recently produced items are recorded as sold first.

Ending Inventory

The cumulative worth of all unsold merchandise at the close of a financial period.

Retail Method

An accounting method used to estimate inventory value by converting the cost of goods available for sale into retail prices and then calculating ending inventory at retail prices.