Set Up an Equation That Can Be Used to Solve

question 11

Multiple Choice

Set up an equation that can be used to solve the problem. Solve the equation and answer the question asked.
-After a 14% price reduction, a boat sold for $21,500. What was the boat's price before the reduction? (Round to the nearest cent, if necessary.)

• A) $3010.00
• B) $25,000
• C) $153,571.43
• D) $24,510.00

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Definitions:

Equity Kickers

Additional equity given to lenders or investors as an incentive, usually in the form of warrants or options.

Option Contract

A financial contract that allows the purchaser the option, without any compulsory enforcement, to purchase or dispose of a base asset at an agreed-upon price, either on or prior to a predetermined date.

Exercise Price

The rate at which an option contract's holder has the right to purchase (for a call option) or dispose of (for a put option) the fundamental asset.

Strike Price

The predetermined price at which a call option can be purchased or a put option can be sold upon exercise.