Your Lease Calls for Payments of R500 at the End

question 48

Multiple Choice

Your lease calls for payments of R500 at the end of each month for the next 12 months.Now your landlord offers you a new 1-year lease which calls for zero rent for 3 months, then rental payments of R700 at the end of each month for the next 9 months.You keep your money in a bank time deposit that pays a simple annual rate of 5 percent.By what amount would your net worth change if you accept the new lease? (Hint: Your return per month is 5%/12 = 0.4166667%.)

• A) -R509.81
• B) -R253.62
• C) +R125.30
• D) +R253.62
• E) +R509.81

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Definitions:

Retribution Bias

The tendency to seek revenge or punishment disproportionate to the offense, often influenced by emotional reactions rather than rational thought.

Defense Mechanism

Psychological strategies used unconsciously by individuals to protect themselves from anxiety or unacceptable thoughts and feelings.

Aggressive Individuals

Refers to persons who exhibit behavior that is forceful, assertive, or intended to dominate.

Derogation of Target Bias

A cognitive bias in which individuals devalue a target or outcome once it becomes unattainable, often to reduce cognitive dissonance.