Author Question: The add-on clause on a consumer loan A) allows you to add on additional loans at the existing ... (Read 77 times)

futuristic · **on:** Jul 11, 2018

The add-on clause on a consumer loan

A)

allows you to add on additional loans at the existing rate on your current loans.
B)

allows the creditor to add on additional interest when the market rate of interest rises.
C)

allows the lender to repossess all goods purchased with the original loan even though your total payments may have been enough to cover an earlier purchase.
D)

allows you to extend the term of the loan by adding on additional installments.

Question 2

You own a contract that promises an annuity cash flow of 100 beginning-of-the-year cash flows for each of the next three years (note: the first cash flow is today).

At an interest rate of 10, what is the future value of this contract exactly three years from today?
A) 248.69
B) 273.55
C) 331.00
D) 364.10

onowka · **Reply #1 on:** Jul 11, 2018

Answer to Question 1

C

Answer to Question 2

D
Explanation: D) Via Calculator: N = 3, I = 10, PV = ), PMT = 100, Set to Begin, solve for FV = 364.10.