You Are Considering Two Loans

question 75

Multiple Choice

You are considering two loans.The terms of the two loans are equivalent with the exception of the interest rates.Loan A offers a rate of 7.75 percent,compounded daily.Loan B offers a rate of 8 percent,compounded semi-annually.Which loan should you select and why?

• A)A; the effective annual rate is 8.06 percent.
• B)A; the annual percentage rate is 7.75 percent.
• C)B; the annual percentage rate is 7.68 percent.
• D)B; the effective annual rate is 8.16 percent.
• E)The loans are equivalent offers so you can select either onE.

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Definitions:

Classical Conditioning

A learning process in which a neutral stimulus becomes associated with a meaningful stimulus and acquires the capacity to elicit similar responses.

Observational Learning

A form of social learning where behaviors are learned by watching and imitating others.

Modeling

Demonstrating a behavior to imitate a behavior that was previously observed.

Partial Reinforcement

A conditioning strategy in which a reward is not administered every time the desired behavior is performed, leading to more resilient behavior than with continuous reinforcement.