You Need Some Money Today and the Only Friend You

question 92

Multiple Choice

You need some money today and the only friend you have that has any is your miserly friend.He agrees to loan you the money you need,if you make payments of $30 a month for the next six months.In keeping with his reputation,he requires that the first payment be paid today.He also charges you 2 percent interest per month.How much money are you borrowing?

• A)$164.09
• B)$168.22
• C)$169.50
• D)$170.68
• E)$171.40

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Definitions:

Opportunity Cost

The cost of foregone alternatives; the value of the best alternative that is not chosen.

Leisure

Free time when individuals are not working, which can be used for rest, recreation, or personal activities.

Opportunity Cost

The worth of the best option that was given up to make a choice.

Leisure

Free time when one is not working or occupied; time available for ease, relaxation, and activities one enjoys.