Find Principal to the Nearest Dollar, Rate to the Nearest

question 16

Multiple Choice

Find principal to the nearest dollar, rate to the nearest tenth of a percent, or time to the nearest day. Use banker's interest.
-Universal Gallery earned $400 interest in 90 days from an investment that paid 5.5%. Find the amount initially invested.

• A)$14,546
• B)$7,273
• C)$29,091
• D)$29,495

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Definitions:

Debt-equity Ratio

A calculation showing how much a firm relies on borrowed funds, determined by dividing the sum of its obligations by the equity of its shareholders.

Pre-tax Cost

The cost of an investment or expense before any taxes are applied, often considered when evaluating investment options.

Cost of Equity

The presumed income given to a firm's equity investors to reimburse them for the risk undertaken with their investment.

Yield-to-maturity

The total return anticipated on a bond if it is held until the end of its lifetime, taking into account both current income and principal repayment.