A Firm Has a Line of Credit and Borrows $25,000

question 33

Multiple Choice

A firm has a line of credit and borrows $25,000 at 9 percent interest for 180 days or half a year.What is the effective rate of interest on this loan if the interest is paid in advance?

• A) 9.4 percent
• B) 4.7 percent
• C) 9.9 percent
• D) 10.3 percent

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Definitions:

Blood

A vital liquid in humans and many animals that delivers necessary substances such as nutrients and oxygen to the cells and transports metabolic waste products away from those same cells.

Adrenal Glands

Small, triangular glands located on top of both kidneys that produce hormones such as adrenaline and cortisol, which regulate metabolism, immune response, and stress.

Kidneys

Vital organs in vertebrates responsible for filtering blood, removing waste products, and regulating fluid balance.

Testes/Ovaries

The primary reproductive organs in males (testes) and females (ovaries), responsible for producing gametes and sex hormones.