Question
10. Gibson Company, Inc. has negotiated a loan for a new delivery truck for its business, under the following terms and conditions : -term of
10. Gibson Company, Inc. has negotiated a loan for a new delivery truck for its business, under the following terms and conditions
: -term of 6 years
; -payments to be made monthly
; -loan amount $72,500
; -contractual rate of interest 7.2%
As soon as the loan is booked, the bank that made the loan sells the contract to a local investor who needs a 6.0% return for the risks of providing debt financing to Gibson. To the nearest dollar, what was the difference between the loan proceeds given to the company and the market price of the loan when sold to the investor?
a. $3,105
b. $1,240
c. $2,504
d. $2,830
e. None of the above
I choose the answer C, but I'm not sure.
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