C is corrent. The lender has a carrying amount of $495,000. This reflects the $500,000 less the $15,000 nonrefundable fee plus the $10,000 loan origination costs. A carrying amount less than the face amount will yield an effective interest rate greater than the stated interest rate of 10%.
A is incorrect. The lender has a carrying amount of $495,000. This reflects the $500,000 less the $15,000 nonrefundable fee plus the $10,000 loan origination costs. A carrying amount less than the face amount will yield an effective interest rate greater than the stated interest rate of 10%.
A is incorrect. The lender has a carrying amount of $495,000. This reflects the $500,000 less the $15,000 nonrefundable fee plus the $10,000 loan origination costs. A carrying amount less than the face amount will yield an effective interest rate greater than the stated interest rate of 10%.
D is incorrect. The lender has a carrying amount of $495,000. This reflects the $500,000 less the $15,000 nonrefundable fee plus the $10,000 loan origination costs. A carrying amount less than the face amount will yield an effective interest rate greater than the stated interest rate of 10%.
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