Assume That You Borrow $2,000 from Your Sister and That

question 3

Multiple Choice

Assume that you borrow $2,000 from your sister and that you will pay her back in one lump sum. She charges you 9 percent interest in year 1 and increases the rate by 1 percent per year until the loan is paid off. How much will you owe if you wait until year 3 to pay off the loan?

• A) $2,467.91
• B) $2,661.78
• C) $2,775.23
• D) $2,809.53

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