Suppose You Borrowed $50,000 at a Rate of 8

question 39

Multiple Choice

Suppose you borrowed $50,000 at a rate of 8.5% and must repay it in 5 equal installments at the end of each of the next 5 years.How much would you still owe at the end of the first year,after you have made the first payment?

• A) $31,171.28
• B) $41,146.10
• C) $40,730.48
• D) $41,561.71
• E) $45,302.27

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Definitions:

Extraordinary Gain

Income from events that are both unusual in nature and infrequent in occurrence, excluded from regular business operations when assessing profitability.

Note Receivable

A financial claim against another party that is evidenced by a written promise to pay a specified sum of money on demand or at a set time.

Impairment

A decrease in the recoverable value of an asset below its carrying amount on the balance sheet, leading to an adjustment of the book value.

Bad Debt Expense

Represents the amount of receivables that a company does not expect to collect and is treated as an expense on the income statement.