How Much Interest Will Have to Be Paid on a Loan

question 18

Multiple Choice

How much interest will have to be paid on a loan of $10,138 for 7 months at a simple interest rate of 13.3% per year?

• A) $786.54
• B) $793.15
• C) $674.18
• D) $898.90

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Definitions:

Cash and Cash Equivalents

Liquid assets that include currency, checks, and short-term investments that can be quickly converted to cash.

Net Income

Net income is the total profit remaining after all expenses, taxes, and costs have been subtracted from total revenues.

Equity

The value of an owner's interest in a property or business, calculated as the difference between the assets and liabilities.

Cash Flow on Total Assets

A measure of the efficiency with which a company generates cash from its assets, calculated as cash flow from operations divided by total assets.