Which of the Following Is Most Accurate About Interest Rates

question 63

Multiple Choice

Which of the following is most accurate about interest rates in Canada?

• A)Charging a rate of three percent for a seven day payday loan is legal in Canada.
• B)As long as loan charges come in the form of fees,they are not included in interest rate calculations in Canada.
• C)Payday loan companies provide a necessary service and have permission to charge above the maximum loan rate in Canada.
• D)The maximum interest rate that can be legally charged on a consumer loan in Canada is 60 percent.

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Definitions:

Marginal Tax Rates

This is the percentage of tax applied to your next dollar of income, varying with taxpayers' income levels within defined tax brackets.

Eligible Dividends

Eligible dividends are those paid by Canadian corporations to Canadian residents, which are eligible for an enhanced dividend tax credit.

CCA Rate

Capital Cost Allowance Rate; a percentage used to calculate the yearly depreciation of tangible property for tax purposes in Canada.

Half-Year Rule

CRA’s requirement to figure CCA on only one-half of an asset’s installed cost for its first year of use.