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

question 55

Multiple Choice

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

Par Value

A value assigned to a security or stock by the company that issues it, typically representing the minimum price the security can be sold for upon its initial offering.

Dividend

A portion of a company's earnings distributed to shareholders, usually in the form of cash or additional shares.

Cash Dividend

A payout from a company's profits, determined by the board of directors, given to a group of its stockholders as cash.

Stockholders' Equity

The residual interest in the assets of a corporation after deducting its liabilities, representing the ownership interest of shareholders.