The Total Amount of Interest for One Year Calculated Annually

question 33

Multiple Choice

The total amount of interest for one year calculated annually on a $18,000 promissory note payable for 3 years at 11% is:

• A) $1,980.
• B) $5,940.
• C) $3,960.
• D) $990.

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Definitions:

Small Used Aircraft

A previously owned aircraft that is smaller in size, often used for personal, business, or small commercial purposes.

Net Present Value

The difference between the present value of cash inflows and the present value of cash outflows over a period of time.

Discount Rate

Within discounted cash flow analysis, it's the interest rate applied to derive the present value of cash flows expected in the future.

Profitability Index

A financial tool used to measure the relative profitability of an investment, calculated as the present value of future cash flows divided by the initial investment cost.