Use the Ordinary Interest Method to Find the Rate of Interest

question 78

Multiple Choice

Use the ordinary interest method to find the rate of interest that Make Over Picture Photo pays on a loan of $8,000 for 285 days, if the amount of interest is $590.00. (Round your answer to the nearest tenth percent)

• A) 9.3%
• B) 9.1%
• C) 9.0%
• D) 8.1%

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Definitions:

Fixed Expenses

Costs that do not fluctuate with changes in production level or sales volume, such as leases and insurance premiums.

Contribution Margin

The amount by which the sale of a product exceeds its variable costs, contributing towards covering fixed costs and generating profit.

Return On Investment (ROI)

A financial metric used to evaluate the efficiency or profitability of an investment, calculated by dividing the benefit (return) of an investment by the cost of the investment.

Net Operating Income

The total profit of a business after operating expenses are deducted but before taxes and interest are calculated.