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Difficulty:
45%
(medium)
Question Stats:
70% (02:08) correct
30%
(02:35)
wrong
based on 141
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History
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Last October, in order to encourage customers to make their outstanding interest payments, a small local bank instituted a policy of forgiving penalties for late payments and offering a relaxed debt plan to everyone paying the entirety of their interest payments. By November, there were twice as many late interest payments as there had been a month prior, although a record amount of interest had been paid back last month.
Which of the following, if true, most helps to explain the apparent inconsistency in the results of the bank’s policy?
A. The relaxed debt plan became an attractive proposal among the customers; so, in order to secure a relaxed debt plan, many customers borrowed much more than they otherwise would have and deliberately skipped interest for October.
B. Even though the grace period convinced some customers to pay back their outstanding interest payments, it did not convince all the customers with outstanding interest payments to pay back all of the interest.
C. The bank did not properly keep track of how many customers availed of the grace period, and some customers did not pay back the entirety of their outstanding interest.
D. The maximum interest payment allowed on a loan at the bank was $5,000 a month, so within the grace period, a customer could accrue $10,000 worth of interest payments at most.
E. Although the bank forgave penalties for late payments during the grace period, the penalties were negligible; hence, waiving the penalties did not provide enough incentive to the customers to pay their outstanding interest.
Which of the following, if true, most helps to explain the apparent inconsistency in the results of the bank’s policy?
A. The relaxed debt plan became an attractive proposal among the customers; so, in order to secure a relaxed debt plan, many customers borrowed much more than they otherwise would have and deliberately skipped interest for October.
B. Even though the grace period convinced some customers to pay back their outstanding interest payments, it did not convince all the customers with outstanding interest payments to pay back all of the interest.
C. The bank did not properly keep track of how many customers availed of the grace period, and some customers did not pay back the entirety of their outstanding interest.
D. The maximum interest payment allowed on a loan at the bank was $5,000 a month, so within the grace period, a customer could accrue $10,000 worth of interest payments at most.
E. Although the bank forgave penalties for late payments during the grace period, the penalties were negligible; hence, waiving the penalties did not provide enough incentive to the customers to pay their outstanding interest.
