Please answer the 2 questions below thx Which one of the following situations wi
ID: 2652754 • Letter: P
Question
Please answer the 2 questions below thx
Which one of the following situations will cause cash flow to creditors to be negative?
Select one:
a. When the rate of interest on all outstanding loans is decreased
b. When the amount of the loan paid off exceeds both the amount of a new loan plus the interest paid
c. When the amount of a new loan exceeds both the interest and principal payments made
d. When there are no new loans and the interest paid exceeds the principal repaid on a loan
e. When there are no new loans and the current loan is paid off in full
Three years ago, you took out a loan for $9,000. Over those three years, you paid equal monthly payments totaling $11,826. What was the APR on your loan?
Select one:
a. 18.69 percent
b. 12.80 percent
c. 20.38 percent
d. 15.45 percent
e. 13.04 percent
2 questions
Explanation / Answer
Answer-1:
Cash flows to creditors shall be negative when the amount of loan paid to them is more than the new amount of loan and interest .
Hence answer shall be :
b. When the amount of the loan paid off exceeds both the amount of a new loan plus the interest paid