The Arthos Group Needs to Borrow $200,000 from Its Bank

question 11

Multiple Choice

The Arthos Group needs to borrow $200,000 from its bank.The bank has offered the company a 12-month installment loan (monthly payments) with 9 percent add-on interest.What is the effective annual rate (EAR) of this loan?

• A) 16.22%
• B) 17.97%
• C) 17.48%
• D) 18.67%
• E) 18.00%

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Definitions:

Mental Processes

Internal, covert activities of our minds, such as thinking, feeling, and remembering, that cannot be directly observed but inferred from behavior.

Thinking

The process of considering or reasoning about something.

Verbal Memories

The memory of words and other abstract symbols, including the ability to recall and recognize language-based material.

Hypothalamus

A region of the brain below the thalamus, coordinating both the autonomic nervous system and the activity of the pituitary, controlling body temperature, thirst, hunger, and other homeostatic systems, and involved in sleep and emotional activity.