Solve the Problem

question 67

Multiple Choice

Solve the problem. Round to the nearest cent as needed.
-A bank has $750,000 to lend for 7 months. It can lend it to a local contractor at a simple interest rate of 12%, or it can lend it to a small business that will pay 12% compounded monthly. If the bank wants to maximize its
Interest earned, who should receive the loan (contractor or business) and what is the additional interest earned?

• A) Contractor; $52,500
• B) Business; $1601.51
• C) Contractor; $1601.51
• D) Business; $54,101.51

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Definitions:

Coercive Power

The ability to compel or force someone to do something through threats or pressure.

Referent Power

A form of influence derived from being admired and respected, often due to charisma or personal traits.

Legitimate Power

A form of authority in which power is granted through societal structures or organizational hierarchies.

Information Triggers

Elements or stimuli that prompt users to seek out more information, which can play a crucial role in marketing and advertising campaigns.