What Is the Equivalent Annual Interest Rate for Purchase Made

question 31

Multiple Choice

What is the equivalent annual interest rate for purchase made with discount terms of 1/10/n75?

• A) 3.52%
• B) 5.81%
• C) 7.69%
• D) 15.43%
• E) 44.35%

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Definitions:

Bankruptcy

A legal process where individuals or organizations declare their inability to pay off their debts.

Sole Proprietorship

A firm with a single owner who has the right to all profits but who also bears unlimited liability for the firm’s losses and debts.

Personal Liability

An individual's legal responsibility to settle a debt or fulfill an obligation from their own assets, as opposed to the liabilities being limited to business assets.

Business Organization

A legal entity formed to conduct business activities, ranging from sole proprietorships to corporations, structured according to law and operational needs.