You Go to Three Different Banks to Borrow $10,000 for One

question 162

Multiple Choice

You go to three different banks to borrow $10,000 for one year.Each says it will lend you the money at 10 percent,but their terms differ as follows: Bank A: Simple interest
Bank B: Add-on interest
Bank C: Discounted interest
Banks A and C require a single payment at the end of the year.Bank B requires 12 equal monthly payments beginning at the end of the first month.What is the difference between the highest and lowest effective annual rate in this case?

• A) 13.0%
• B) 9.5%
• C) 9.0%
• D) 8.5%
• E) 8.0%

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Definitions:

Relative Pull

The degree to which a product, service, or content attracts interest or engagement in comparison to competing options.

Sales Conversion

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Return On Target Influence Model

A marketing model that evaluates the efficiency of influencers by measuring the return on investment from targeting specific influential individuals.

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