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

question 104

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 if interest is compounded annually?

• A) 5.26%
• B) 7.39%
• C) 9.00%
• D) 10.00%

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Definitions:

Functionalism

A school of psychology that focuses on how mental and behavioral processes enable an organism to adapt, survive, and thrive.

Self-Awareness

Awareness about one’s distinct personality, sentiments, reasons for actions, and longings.

Human Capacity

Human capacity refers to the potential or ability of individuals to achieve or accomplish tasks, learn new skills, or adapt to varying environments.

Structuralism

An approach in psychology that seeks to understand the structure of the mind and its perceptions by analyzing those components most basic to consciousness.