A $33,950 Loan at 10

question 14

Multiple Choice

A $33,950 loan at 10.6% compounded semi-annually is to be paid off by a series of $4,000 payments that will be made at the end of every six months. How much of the 10^th payment will be credited towards reduction of the principal?

• A) 477
• B) $497
• C) $713
• D) $1,005
• E) $1,193

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Definitions:

Recover Money

The act or process of legally reclaiming monetary losses or damages through judicial or administrative procedures.

Accommodated Party

In finance, the party for whom a loan or credit extension is made, usually facilitated by the guarantee or cosigning by another party.

Ratification

The formal approval or confirmation of an act or agreement that was signed but not yet authorized.

Unauthorized Agent

An individual who acts on behalf of another without having the legal or official permission to do so.