Your bank has agreed to grant you a discount loan with an APR of 5.25%. If you need $5,000 today, how large is the face value of the loan?
A) $4,751
B) $5,000
C) $5,263
D) $5,277
Answer: D
Explanation: D) To receive $5,000 the size of the discount loan must be net loan amount ÷ (1 - r)
= $5,000 ÷ (1 - .0525) = $5,277.
Business
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The United Nation of Amberia, a Western European country, fought on the winning side of the Cold War. Which of the following was most likely being propagated by the country by participating in the Cold War?
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