Neal Wants to Borrow $2,500 and Has Received the Offers

question 48

Multiple Choice

Neal wants to borrow $2,500 and has received the offers from his local banks. Which offer should Neal accept if he wants to repay the loan in one single payment two years from now?

• A) Bank A, which offers a simple rate of 4%.
• B) Bank B, which offers a simple rate of 5%.
• C) Bank C, which offers a rate of 4% compounded annually.
• D) Bank D, which offers a rate of 5% compounded annually.
• E) Bank E, which offers a rate of 5% compounded monthly.

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Definitions:

Automatic Process

Cognitive processes that occur with little to no conscious effort or attention.

Concentrated

Refers to an increased proportion of a substance within a solution or mixture.

Effortful

Requiring or characterized by physical or mental exertion, often in relation to a task or goal that requires significant attention and conscious effort to achieve.

Implicit Memory

Memories that are not consciously recalled but influence behaviors and knowledge, such as skills and tasks.