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Cindy Is Taking Out a Loan Today

Question 37

Multiple Choice

Cindy is taking out a loan today.The cash amount that she is receiving is equal to the present value of the lump sum payment that she will be required to pay two years from today.Which type of loan is this?


A) Principal-only
B) Amortized
C) Interest-only
D) Compound
E) Pure discount

Correct Answer:

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