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

question 122

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.

From the pawn shop's viewpoint, what is the IRR of this transaction?

• A) 1.0% per month
• B) 1.7% per month
• C) 2.0% per month
• D) 2.5% per month
• E) 3.0% per month

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Definitions:

Circuit

A closed path through which electric current flows or may flow.

Reactive Power

The portion of electricity that establishes and sustains the electric and magnetic fields in AC operations, measured in volt-amperes reactive (VAR).

RLC Series Circuit

A circuit configuration comprising a resistor (R), inductor (L), and capacitor (C) connected in series.

Applied Voltage

The voltage that is externally applied to an electrical circuit or device, which drives the current through it.