You Need to Borrow $2,000 Quickly, and the Local Pawn

question 371

Multiple Choice

You need to borrow $2,000 quickly, and the local pawn shop will give it to you if you promise to repay them $200.92 monthly over the next year.

Suppose that the pawn shop's cost of funds is 12%, compounded monthly. From its viewpoint, what is the NPV of this deal?

• A) $44.11
• B) $111.01
• C) $226.17
• D) $261.37
• E) $292.01

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Definitions:

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A religious or cultural practice in which cows are revered, protected, and considered sacred, particularly in Hinduism.

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Is the tendency for people to judge other cultures exclusively by the standards of their own culture.

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A cultural movement that spanned the period roughly from the 14th to the 17th century, beginning in Italy in the Late Middle Ages and later spreading to the rest of Europe.

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A period of dramatic change in thought and belief, closely associated with the 16th and 17th centuries, which led to the emergence of modern science through the rejection of medieval scientific philosophies.