A Loan of $10,000 Is Taken Out on November 7,2006

question 63

Multiple Choice

A loan of $10,000 is taken out on November 7,2006 at a simple interest rate of r = 9%.The loan will be paid back on May 11,2007.If the bank uses ordinary interest (the Banker's Rule) ,how much interest is charged?

• A)$443.84
• B)$450.00
• C)$456.16
• D)$462.50

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Definitions:

Excludable

A characteristic of a good or service that allows its owner to prevent others from using it, typically through the mechanism of property rights.

Rival in Consumption

A characteristic of a good whereby consumption by one individual prevents simultaneous consumption by another individual.

Rival in Consumption

A characteristic of goods whereby the consumption by one individual reduces the availability of the good for consumption by another individual.

Potato Chips

Thin slices of potato that are fried or baked until crisp and served as a snack.