Your bank has agreed to grant you a discount loan with an APR of 4.25%.If you need $8,000 today,how large is the face value of the loan?

Question

Quizplus · Accepted Answer

To calculate the face value of the loan, we need to use the formula: 
Face value = Loan amount / (1 - APR x Loan period)
Assuming the loan period is one year, we can plug in the given values:
Face value = $8,000 / (1 - 0.0425 x 1)
Face value = $8,355.03 (rounded to the nearest cent)
Therefore, the best choice is A, $8,355.

Your Bank Has Agreed to Grant You a Discount Loan