Suppose That You Have $100 Today and Expect to Receive

question 8

Multiple Choice

Suppose that you have $100 today and expect to receive $100 one year from today. Your money market account pays an annual interest rate of 25%, and you may borrow money at that interest rate. Suppose that you borrow $60 and spend $160 today. After you repay your loan one year from today, how much money will you have available for consumption one year from today?

• A)$0
• B)$25
• C)$50
• D)$75

---

Definitions:

Mental Competency

The ability of an individual to understand the nature and effects of their actions, particularly relevant in legal proceedings and contracts.

Declaring Incompetent

A legal status adjudged by a court where an individual is deemed incapable of managing their own affairs due to mental disability or incapacity.

Appointing a Guardian

Appointing a guardian involves legally designating an individual to make decisions and care for another person, typically a minor or someone unable to care for themselves.

Designer Outfit

Clothing created by a fashion designer, often branded, and characterized by exclusive designs, high quality, and high price.