Interest Rate: Rachael Steele Wants to Borrow $6,000 for a Period

question 40

Multiple Choice

Interest rate: Rachael Steele wants to borrow $6,000 for a period of four years. She has two choices. Her bank is offering to lend her the amount at 7.25 percent compounded annually. She can also borrow from her firm and will have to repay a total of $8,130.93 at the end of four years. Should Rachael go with her bank or the firm, and what is the interest rate if she borrows from her firm? (Round to the nearest percent.)

• A) Bank: 9%
• B) Firm: 7%
• C) Bank: 8%
• D) Firm: 6%

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Definitions:

Managed Care

A health care delivery system aimed at managing the quality and cost of medical services.

Mental Health Services

Professional services that assess, diagnose, and treat mental health conditions or support mental wellbeing.

Reducing Cost

The process or strategy of lowering expenses in business operations, personal finance, or public spending without compromising on the quality of goods and services.

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The engagement with online platforms where users create, share, or exchange information and ideas in virtual communities.