Question

Sam would like to use his extensive stamp collection as collateral for a secured loan. Sam has documentation that says his stamp collection is worth $10,525.00. Sam's bank has a policy that permits loan officers to lend no more than 82.5% of the value of the collateral. What is the maximum loan amount Sam can get from his bank using his stamp collection as collateral?
a.
$8,683.13
b.
$9,700.00
c.
$10,525.00
d.
$12,382.35


Please select the best answer from the choices provided

A
B
C
D

Answer 1

A

0.825 × $10,525.00 = $8,683.125 → $8,683.13, so choice A.