If a Borrower Promises to Pay You $1,900 Nine Years

question 28

Multiple Choice

If a borrower promises to pay you $1,900 nine years from now in return for a loan of $1,000 today, what effective annual interest rate is being offered?

• A)5.26 percent
• B)7.39 percent
• C)9.00 percent
• D)10.00 percent PV =

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Definitions:

General Partnership

A business owned by two or more people who have made a decision to comanage and share in the profits and losses.

Liable

Being legally responsible for something, typically involving financial compensation or obligations.

Discrimination

Unjust or prejudicial treatment of different categories of people or things, especially on the grounds of race, age, sex, or disability.

Sexual Orientation

An individual's pattern of emotional, romantic, or sexual attraction to others, based on the gender(s) to which one is attracted.