Solved

If You Borrow $2,000 from a Bank for One Year

Question 84

Multiple Choice

If you borrow $2,000 from a bank for one year at a stated annual interest rate of 14 percent,but interest is prepaid (a discounted loan) ,then what is your effective annual rate?


A) 14.00%
B) 8.57%
C) 16.28%
D) 21.21%
E) 28.00%

Correct Answer:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions

Q79: The primary motivation behind out-sourcing is to

Q80: Many start-up firms never make it past

Q82: Because the use of short-term debt to

Q83: Determining the appropriate amount of total current

Q85: East Lansing Appliances<br>East Lansing Appliances (ELA) expects

Q87: A lockbox plan is<br>A) A method for

Q88: Generally,ordering costs are the single most important

Q89: Short-term financing might be riskier than long-term

Q99: Synchronization of cash flows is an important

Q103: If your firm's DSO or aging schedule