Samantha Deposits $250 into an Account and One Year Later

question 96

Multiple Choice

Samantha deposits $250 into an account and one year later has $270.What interest rate was paid on Samantha's deposit?

• A) 8 percent
• B) 9 percent
• C) 10 percent
• D) None of the above is correct.

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Definitions:

Cost of Equity

The rate of return required by a company's shareholders for investing in the company, representing the compensation for the risk undertaken.

Cost of Debt

The actual rate at which a corporation incurs cost on its present liabilities, assessable before or after tax deductions.

Tax Rate

The quantified percentage of an individual’s or corporation’s income that is taken as tax.

Cost of Preferred Stock

The required rate of return on preferred stock, which is typically fixed.