Paul Borrowed $200 to Be Repaid in One Year

question 116

Multiple Choice

Paul borrowed $200 to be repaid in one year. He paid 10% interest and a service charge of $3.00. What is his finance charge?

• A) $3.00
• B) $20.00
• C) $23.00
• D) $200.00
• E) $223.00

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Definitions:

Debt And Equity Financing

Ways in which a company raises funds through borrowing (debt) or selling ownership shares (equity).

ROE

Return on Equity, a measure of financial performance calculated by dividing net income by shareholder's equity.

ROA

Return on assets (ROA) is a financial ratio that shows the percentage of profit a company earns in relation to its overall resources.

Liabilities

Measurable obligations resulting from a past transaction; they are expected to be settled in the future by transferring assets or providing services.