Solve the Problem

question 69

Multiple Choice

Solve the problem. Round rates to the nearest tenth of a percent, dollar amounts to the nearest cent, and time to the nearest day.
-Sam Peters signs a $4,500 note. His bank charges a 10% discount rate. Find the effective rate charged by the bank if the note is for 9 months.

• A)9.7%
• B)10.9%
• C)10%
• D)10.8%

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Definitions:

Variable Costs

Costs that change in proportion to the level of goods or services produced by a business.

Rate of Return

A measure of the profitability or efficiency of an investment, expressed as a percentage of the original investment.

Variable Cost Concept

A principle in economics that refers to costs that vary directly with the level of production or service activity.

Rate of Return

A measurement of the gain or loss on an investment over a specific period, expressed as a percentage.