A local restaurant decides to take out an amortized loan as follows: Amount of loan = $50,000; Interest rate = 8%; Term = 5 years. After two instalments the borrower decides to pay off the loan. What is the payoff amount? a. $32,273 b. $22,331 c. $31,543 d. $31,670
A local restaurant decides to take out an amortized loan as follows: Amount of loan = $50,000; Interest rate = 8%; Term = 5 years. After two instalments the borrower decides to pay off the loan. What is the payoff amount? a. $32,273 b. $22,331 c. $31,543 d. $31,670
Chapter19: Lease And Intermediate-term Financing
Section: Chapter Questions
Problem 19P
Related questions
Question
A local restaurant decides to take out an amortized loan as follows: Amount of loan = $50,000; Interest rate = 8%; Term = 5 years. After two instalments the borrower decides to pay off the loan. What is the payoff amount?
a.
$32,273
b.
$22,331
c.
$31,543
d.
$31,670
Accrual basis in loan pricing refers to
a.
the number of days used to calculate interest
b.
the effective yield
c.
the method of accounting used to record the loans
d.
none of the above
Which of the following accurately describes the other real estate owned that appears as an asset on the bank’s balance sheet?
a.
includes premises and equipment
b.
includes only the land owned by the bank.
c.
usually represents property obtained through foreclosure on problem loans
d.
is limited to the equipment owned by the bank
Collateral does not reduce the risk of a loan per se, because
a.
it is not part of the loan agreement
b.
the risk of a loan is determined by the borrower’s willingness and ability to repay the loan
c.
it may be worth less than the bank thinks
d.
the bank may not have title to the collateral
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 2 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Recommended textbooks for you
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:
9781337514835
Author:
MOYER
Publisher:
CENGAGE LEARNING - CONSIGNMENT
Pfin (with Mindtap, 1 Term Printed Access Card) (…
Finance
ISBN:
9780357033609
Author:
Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Publisher:
Cengage Learning
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:
9781337514835
Author:
MOYER
Publisher:
CENGAGE LEARNING - CONSIGNMENT
Pfin (with Mindtap, 1 Term Printed Access Card) (…
Finance
ISBN:
9780357033609
Author:
Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Publisher:
Cengage Learning