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Desolo Desolo
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Posts: 11831
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10 years ago
Mike deposited $100,000 in a bank and procured a certificate of deposit on it, payable to himself, and for repayment in 5 years with a 5 percent interest rate. A year after that, Mike borrows $25,000 from Jill, and gives her a promissory note to repay it in one year. As collateral, Mike gave Jill the certificate of deposit and asked to put in a prepayment clause to which Jill agreed. They mutually agreed that Mike could repay in monthly payments, as mentioned it in the note.
If Mike defaults on the payment even after one year, which of the following is true of the foreclosure options Jill has with the certificate of deposit Mike gave her?
A) The bank has to pay her only after the five-year period mentioned in the CD.
B) The bank does not have to pay her for the CD.
C) The bank has to pay her the difference of $75,000.
D) The bank has to pay her $25,000 with one year interest at 5 percent on demand.

This is for my business law class, anything will help
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bbbbbb
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9 years ago
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Desolo Author
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#2
9 years ago
It was correct. Thanks.
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