If You Borrow $2,000 from a Bank for One Year

question 84

Multiple Choice

If you borrow $2,000 from a bank for one year at a stated annual interest rate of 14 percent,but interest is prepaid (a discounted loan) ,then what is your effective annual rate?

• A) 14.00%
• B) 8.57%
• C) 16.28%
• D) 21.21%
• E) 28.00%

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Definitions:

Optimising

The process of making something as effective, perfect, or functional as possible through careful adjustments and improvements.

Organisational Conflict

Organisational conflict arises when there are disagreements or incompatibilities between individuals or groups within a company, often stemming from different values, goals, or needs.

Substantive Conflict

A disagreement over issues key to the objectives and goals of a project or organization, potentially leading to functional outcomes if managed well.

Administrative Conflict

A disagreement or dispute arising within the context of the administrative functions of an organization, often involving issues of power, decision-making, or resource allocation.