Suppose You Borrow $1000 from a Finance Student and Promise

question 68

Multiple Choice

Suppose you borrow $1000 from a finance student and promise to pay them back within one year. If the interest rate on the loan is 1.25% per month, what is the effective annual interest rate (EAR) ?

• A) 14.25
• B) 10.25
• C) 16.075
• D) It cannot be determined.

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Definitions:

Self-Disclosing

The act of revealing personal information to others in order to foster trust and openness in relationships.

Trust Leaders

Individuals who are capable of inspiring reliance or confidence in others through their integrity, capabilities, and actions.

Trust Others

The act of believing in the reliability, truth, ability, or strength of someone else.

Viewed Untrustworthy

The perception of an individual or entity as not being reliable, dependable, or worthy of trust.