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
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Answer:
a. $8,683.13
Step-by-step explanation:
It is given that:
- The stamp collection is worth 10,525 $
- Bank can not lend more than 82.5% of the value of the collateral.
Hence, we need to calculate how much the 82.5% of the stamp collection is worth.
Maximum Loan Amount = 0.825*10,525 = 8683.13 $
Therefore, the correct answer is: a. $8,683.13
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