1. Which of the following is true of loan collateral?
Loans secured by collateral always have higher finance charges than unsecured loans.
Collateral is an item of value used to secure the interest portion of a loan.
Collateral is an item of value used to secure the principal portion of a loan.
Collateral is always required by banks to lend to customers with good credit ratings.
Loans are secured by collateral that is readily marketable at a price high enough to cover the interest portion of the loan.
2. The amount of a loan is $ 15,000 that expires in 12 months at a rate of 16%, Calculate its value considering each case independently
a) The present day
b) one year and 26 days
c) 8 months
d) 5 months and 18 days
e)15 months