Como Company Borrowed $5,200 from Its Bank A) 7%
B) 8%
C) 9%
D) 29

question 95

Multiple Choice

Como Company borrowed $5,200 from its bank. Como will repay $7,300 in five years. What is the approximate interest rate that Como will incur on this loan, assuming annual compounding? Use the future value of $1 table.
Excerpt of Future Value of $1 Table
$$\begin{array} { | c | c | c | c | } \hline \text { Periods } & \mathbf { 7 \% } & \mathbf { 8 \% } & \mathbf { 9 \% } \\\hline 1 & 1.07000 & 1.08000 & 1.09000 \\\hline 2 & 1.14490 & 1.16640 & 1.18810 \\\hline 3 & 1.22504 & 1.25971 & 1.29503 \\\hline 4 & 1.31080 & 1.36049 & 1.41158 \\\hline 5 & 1.40255 & 1.46933 & 1.53862 \\\hline 6 & 1.50073 & 1.58687 & 1.67710 \\\hline\end{array}$$

• A) 7%
• B) 8%
• C) 9%
• D) 29%

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Definitions:

Discrimination Coefficients

Metrics used in econometrics and statistical analyses to measure the extent of discrimination or bias present in a model or decision-making process.

Wage Rate

The amount of money paid to an employee per unit of time, such as an hour or week, for their work services.

Racial Prejudice

A bias against individuals based on their race, often manifesting in negative attitudes or unfair treatment.

Discrimination Coefficients

Discrimination coefficients quantify the level of differentiation or bias between groups in statistical analysis, often used to measure the extent of inequality in treatment or outcomes.