Use the Simple Interest Formula to Determine the Missing Value

question 85

Multiple Choice

Use the simple interest formula to determine the missing value. Round dollar amounts to the nearest cent and percents to the nearest hundredth when necessary
-p = $2400, r = ?, t = 4 years, i = $720.00

• A) r = 18.9%
• B) r = 0.08%
• C) r = 13.33%
• D) r = 7.5%

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Definitions:

Interest Expense

The cost incurred by an entity for borrowed funds, which is considered a non-operating expense on the income statement.

Gross Profit

The revenue a company retains after subtracting the expenses related to the production and sale of its goods or the provision of its services.

Operating Expenses

Recurring expenses related to the normal operations of a business, such as salaries, rent, utilities, and marketing costs, excluding the cost of goods sold.

Cost of Goods Sold

The expenditures directly related to generating the products a firm sells, which include the costs of materials and labor.