Question

On January 1, year 1, a company borrows $50,000 with the promise to repay the amount plus interest in two years (on January 1, year 3). Which of the following statements about this loan are true?

1) The loan amount is $50,000
2) The loan will be repaid on January 1, year 2
3) The loan will be repaid on January 1, year 3
4) The loan does not include any interest

Answer 1

The loan amount is $50,000 and the loan will be repaid on January 1, year 3.

Step-by-step explanation:

The correct statements about this loan are:

1. The loan amount is $50,000.
2. The loan will be repaid on January 1, year 3.

Statement 1 is true because the company borrows $50,000 on January 1, year 1. Statement 2 is true because the repayment is scheduled for January 1, year 3, which is two years after the loan was borrowed. The other statements are not true, as the loan does include interest and is not repaid on January 1, year 2.