I was playing Monopoly all night while waiting for your answer. I’m wealthy enough to play with real money but I play the game with my dog and cat (the cat cheats), so they always trade their winnings in for a few Scooby Snacks and some catnip. Dogs and cats are not as smart as bankers are, but I greatly prefer their company.
Tell me: did you or do you still play the game? Did/does anyone trust you enough to be the banker?
I knew you’d get this wrong! You usually interpret these “odd ball” questions wrong. It makes sense you would because you were a banker, and this scenario would never occur in the real world. You were never conditioned nor practiced to think this way.
This is how I interpret the question. The debtor has two options to repay the $100,000.
Option 1: pay $1,110.21 per month for 120 months. This works out to a loan rate of 6.00%.
Option 2: pay $550.10 plus a fixed percentage each and every month until the entire loan is paid off.
If this were an interest free loan then the payments would be $833.33 per month for 120 months. Subtracting $550.10 from $833.33 gives $283.23. This is 51.49%. So, by paying $550.10 plus a fixed percentage of 51.49% ($283.23) per month you meet the loan requirements and pay zero interest.
This seems like the better deal to us genetically enhanced chimps.