A Judge Requires Harry to Make a Payment to Sally

question 76

Multiple Choice

A judge requires Harry to make a payment to Sally.The judge says that Harry can pay her either $10,000 today or $11,000 two years from today.Of the following interest rates,which is the lowest one at which Harry would be better off paying $11,000 two years from today?

• A)2 percent
• B)3 percent
• C)4 percent
• D)5 percent

---

Definitions:

Asymmetrical

Lacking symmetry; having parts that fail to correspond to one another in shape, size, or arrangement.

Average

A statistical measure representing the central or typical value in a set of data, commonly calculated as the sum of the values divided by the number of values.

Mere-exposure Effect

A psychological phenomenon where people tend to develop a preference for things merely because they are familiar with them.

Proximity

The physical or psychological closeness or distance between people, objects, or concepts, affecting relationships and interactions.