Aaron Company Borrows $4,000 by Giving the Bank Its Own

question 7

Multiple Choice

Aaron Company borrows $4,000 by giving the bank its own 8%, 90-day note. The bank discounts the interest. The effective interest rate is: (Use a 360-day year. Do not round any intermediate calculations. Round your final answer two decimal places, X.XX%.)

• A) 7.84%.
• B) 8.16%.
• C) 8.00%.
• D) 8.33%.

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Definitions:

Distribution

In statistics, the way in which values of a variable are spread or dispersed across a set of data.

Standard Deviation

A statistical measure that quantifies the amount of variation or dispersion of a set of data values from the mean.

Variability

The measure of how data points in a statistical distribution or dataset diverge from the average or mean value.

Central Tendency

A statistical measure that identifies a single value as representative of an entire distribution of data, commonly exemplified by the mean, median, or mode.