(Last Word) Suppose You Borrow $500 for a Year and the Lender

question 57

Multiple Choice

(Last Word) Suppose you borrow $500 for a year and the lender discounts $75 of interest at the time the loan is made (giving the borrower only $425) . The interest rate on this loan is about

• A) 12.5 percent.
• B) 14.5 percent.
• C) 17.6 percent.
• D) 10 percent.

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Definitions:

Tea Act

A 1773 British law that lowered the tax on tea to aid the financially troubled British East India Company, leading to the Boston Tea Party and escalating tensions between Britain and the American colonies.

East India Company

A British trading company granted a monopoly on trade in the East Indies, playing a crucial role in British imperial expansion and control over India.

Surcharge

An additional charge, tax, or cost added to the usual cost of goods or services.

Coercive Acts

British legislation passed in 1774 designed to punish the Massachusetts colonists for the Boston Tea Party.