You Want to Borrow $1,000 from a Friend for One

question 108

Multiple Choice

You want to borrow $1,000 from a friend for one year,and you propose to pay her $1,120 at the end of the year.She agrees to lend you the $1,000,but she wants you to pay her $10 of interest at the end of each of the first 11 months plus $1,010 at the end of the 12th month.How much higher is the effective annual rate under your friend's proposal than under your proposal?

• A) 0.00%
• B) 0.45%
• C) 0.68%
• D) 0.89%
• E) 1.00%

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Definitions:

Counts of Resolution

A measure of the smallest movement or change in position that a sensor or device can detect.

DMM Probes

Tools used with a digital multimeter to make physical contact with the component or circuit being measured.

Rubber Insulator

A component made of rubber used to electrically isolate two parts of a structure, preventing unwanted electrical conduction.

Wingman/VORAD

Advanced radar and sensor systems used in vehicles to enhance safety by monitoring surrounding traffic conditions and obstacles.