Ronald Is Borrowing $20,000 Using the Discount Method

question 71

Multiple Choice

Ronald is borrowing $20,000 using the discount method.His bank is offering him an annual percentage rate of 8.5% and he is taking out the loan for 24 months.How large of a check will Ronald receive from this loan when he leaves the bank? How much will he repay?

• A)$20,000;$23,400
• B)$16,600;$20,000

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Definitions:

Celebrations

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Problem-Solving Ability

The capacity to find solutions for difficult or complex issues, which involves critical thinking and often creative strategies.

Written Exam

A test administered on paper or on a computer, meant to assess knowledge, comprehension, and sometimes application skills in a specific area or subject.

Mental Rotation

The cognitive ability to rotate mental representations of two-dimensional and three-dimensional objects.