Calculate the Annual Return Earned by a Lender on a Sum

question 51

Multiple Choice

Calculate the annual return earned by a lender on a sum of $800 lent out at 8 percent interest, if prices inflate at the rate of 5 percent per annum.

• A)$909.03
• B)$808.50
• C)$800.67
• D)$907.20

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Definitions:

Intersects

The point at which two lines or curves meet or cross each other.

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A reference line drawn on a graph that serves as a baseline for measuring distances.

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A measure of the warmth or coldness of an environment or substance, typically expressed in degrees Celsius or Fahrenheit.