If the Interest Rate Is 9 Percent, to Get Back

question 16

Multiple Choice

If the interest rate is 9 percent, to get back $800 in one year you would need to deposit ________ today.

• A) $720.72.
• B) $714.29.
• C) $733.95.
• D) $791.00.

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Definitions:

Fixed Expenses

Costs that do not change in total despite changes in the volume of goods or services produced or sold, such as rent or salary expenses.

Volatility

This refers to the degree of variation of a trading price series over time, typically measured by the standard deviation of logarithmic returns.

Net Income

Net Income is the total earnings of a company after all expenses and taxes have been subtracted from total revenue, indicating profitability.

Contribution Margin Ratio

A measure that indicates the percentage of each sales dollar that contributes to covering fixed costs and generating profit.