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Scott Borrowed $2,500 Today at an APR of 7

Question 21

Multiple Choice

Scott borrowed $2,500 today at an APR of 7.4 percent.The loan agreement requires him to repay $2,685 in one lump sum payment one year from now.This type of loan is referred to as a(n) :


A) interest-only loan.
B) pure discount loan.
C) quoted rate loan.
D) compound interest loan.
E) amortized loan.

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