You Go to Three Different Banks to Borrow R10,000 for One

question 46

Multiple Choice

You go to three different banks to borrow R10,000 for one year.Each says it will lend you the money at 10 percent, but their terms differ as follows: 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%

---

Definitions:

IPIP

The International Personality Item Pool, which is a public domain collection of items for the assessment of personality traits.

Continuum

A continuous sequence, range, or whole in which no part or division is noticeably different or distinct from adjacent parts.

Personality Questionnaire

A survey designed to evaluate aspects of an individual's character, preferences, and psychological traits.

Morality

Principles concerning the distinction between right and wrong or good and bad behavior.