Zach bought a car for $20,000. He

paid a $5,000 down payment and

will pay $450 per month for 5

years. What type of liability is this

for Zach?

A. liquid

B. long-term

C. short term

D. budget

paid a $5,000 down payment and

will pay $450 per month for 5

years. What type of liability is this

for Zach?

A. liquid

B. long-term

C. short term

D. budget

Answer:The correct answer is B. Long-term.

Step-by-step explanation:Since Zach has bought a car for $ 20,000 paying a down payment of $ 5,000 and monthly payments of $ 450 per month for 5 years, he will be paying a total of $ 32,000 for that car (5,000 + 450 x 12 x 5). Thus, the responsibility that Zach has incurred forces him to maintain his monthly payment obligation for 5 years, thus becoming a long term liability.