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%

---

Definitions:

Gender Roles

Gender roles are societal norms dictating the types of behaviors that are considered acceptable, appropriate, or desirable for people based on their actual or perceived sex.

Gender

The range of characteristics pertaining to, and differentiating between, masculinity and femininity.

Sex

A biological category based on reproductive organs and genetic makeup, commonly classified as male or female.

Psychoanalytic

Pertaining to a theory of psychology founded by Sigmund Freud, focusing on the role of unconscious motivations and early childhood experiences in determining behavior and personality.