Question

Cindy would like to borrow money from her bank to restore her collectible car. It will take $12,000 to fully restore the car. Cindy's bank offers secured loans at 89% of the collateral value. How much collateral does Cindy need to offer to get a loan big enough to allow her to fully restore her car?

Answer 1

Answer:

$13,483.15

Explanation:

Data provided in the question;

Amount required to fully restore the car = $12,000

Percentage of collateral value provided as loan = 89%

Now,

Let us assume that the value of the collateral be 'x' so that the bank issues the amount of $12,000 as loan

Therefore,

89% of x = $12,000

or

0.89 × x = $12,000

or

x = $\frac{\ 12,000}{0.89}$

or

x = 13483.146 ≈ $13,483.15

Hence,

Cindy need to offer $13,483.15 collateral to get a loan big enough to allow her to fully restore her car

Answer 2

Answer:

The answer is D.  $13,483.15

Explanation:

EDGE 2020