CIBC Approved a $10 000 Personal Line of Credit on a Demand

question 12

Multiple Choice

CIBC approved a $10 000 personal line of credit on a demand basis to Tara, who takes an advance of $2240 on 1st of every month to settle her monthly budget. She settles her loan when she receives her pay on 15th of every month. Interest at the rate of prime (3%) plus 2.75% is charged to the account at the bank on the 15th of each month. What is Tara's payment each month to settle the loan?

• A) $2245.29
• B) $5.29
• C) $2240
• D) $2368.80
• E) $2263.63

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Definitions:

Productive Resource

An asset or input used in the production of goods and services, such as labor, land, and capital.

Trade Surplus

A Trade Surplus occurs when the value of a country's exports exceeds the value of its imports within a certain period.

Trade Deficit

A situation where a country's imports exceed its exports.

Comparative Advantage

The ability of an entity to produce a good or service at a lower opportunity cost than others, leading to specialized trade benefits.