To Start a Mobile Dog-Grooming Service, a Woman Borrowed $2,400

question 93

Multiple Choice

To start a mobile dog-grooming service, a woman borrowed $2,400. If the loan was for 2 years and the amount of interest was $120, what simple interest rate was she charged?

• A) 2.1%
• B) 2.5%
• C) 2.8%
• D) 2.3%
• E) 2.4%

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Definitions:

After-Tax Cost

The actual cost of an expense or investment after taking into account the effects of taxes.

Debt

An amount of money borrowed by one party from another, under the condition that it is to be paid back at a later date, usually with interest.

Tax Rate

The share of profits or income that individuals or companies must pay to the government as taxes.

Market-To-Book Ratio

A financial ratio that compares a company's market value to its book value, used to evaluate whether a stock is under or overvalued.