What Annual Rate of Return Is Implied on a $700

question 68

Multiple Choice

What annual rate of return is implied on a $700 loan taken next year when $800 must be repaid in year 3?

• A) 4.55 percent
• B) 4.76 percent
• C) 6.90 percent
• D) 7.14 percent

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Definitions:

Voidable Contract

A contract that may be voided or canceled by one of the parties.

Statute of Frauds

A legal doctrine that requires certain types of contracts to be in writing and signed by the party to be charged, to be enforceable.

Writing

The process of using symbols, such as letters, to communicate thoughts and ideas in a readable form.

Enforceable

Capable of being imposed or implemented legally, such as a contract or rule.