GFOA Exam CPFO Topic 12 Question 98 Discussion

Actual exam question for GFOA's CPFO exam

Question #: 98
Topic #: 12

If the $20,000 is loaned at a stated interest rate of 10%with the requirement that an 18% minimum compensating balance be kept, the APR (annual percentage rate) is:

A12.07%

B12.00%

C12.2%

D13%

Show Suggested Answer

Suggested Answer: C

by Dalene at Sep 15, 2024, 09:44 PM

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Anabel

2 months ago

Wait, is this a trick question? What if the answer is actually a percentage that makes the lender weep with joy?

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Marcelle

2 months ago

13%? Really? That's way too high. The question doesn't mention anything about additional fees or charges.

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Sharen

1 months ago

D) 13%

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Wilson

2 months ago

C) 12.2%

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Nadine

2 months ago

B) 12.00%

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Nieves

2 months ago

A) 12.07%

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Kaycee

3 months ago

Hold on, I think it's 12.2%. The math just works out better with that answer.

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Keith

1 months ago

I agree with you, 12.2% seems to be the correct answer.

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Casey

2 months ago

I'm not sure, but I think it might be 12.00%.

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Lenna

2 months ago

I think it's actually 12.07%, the math checks out.

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Odette

3 months ago

12% seems more plausible to me. The stated interest rate and minimum compensating balance requirements point to that.

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Antione

2 months ago

I'm leaning towards 12.2%, but I can see why 12% makes sense too.

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Dulce

2 months ago

I think it might be 12.07%, considering the stated interest rate and compensating balance requirement.

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Royal

2 months ago

I agree, 12% does seem like the most plausible option here.

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Erasmo

2 months ago

D) 13%

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Beckie

2 months ago

C) 12.2%

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Francene

2 months ago

B) 12.00%

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Kathryn

2 months ago

A) 12.07%

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Linwood

3 months ago

I'm not sure, but I think the answer might be C) 12.2% because it seems like a slightly higher rate.

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Wendell

3 months ago

I agree with Elza, because the APR takes into account the effect of the compensating balance requirement.

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Tamekia

3 months ago

The APR is definitely 12.07%. I'm confident about this answer.

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Carry

2 months ago

I believe it's 12.2%

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Rasheeda

2 months ago

I agree with the first answer, 12.07%

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Artie

3 months ago

I'm not sure, maybe it's 12.00%

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Jacqueline

3 months ago

I think it's 12.07%

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Elza

3 months ago

I think the answer is A) 12.07%

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