D'Anconia Copper Has Borrowed $5 Million for Six Months at a Stated

question 36

Multiple Choice

d'Anconia Copper has borrowed $5 million for six months at a stated annual rate of 10%,using inventory stored in a field warehouse as collateral.The warehouse charges a $25,000 fee,payable at the end of the six months.The effect annual rate on this loan is closest to:

• A)9.3%
• B)11.3%
• C)15.2%
• D)17.1%

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Definitions:

Antabuse

A prescription medication used to treat alcohol dependency, creating an adverse reaction to alcohol consumption.

Stress Relief

Various methods or activities aimed at reducing the physical or emotional effects of stress on an individual.

Alcoholics

Individuals suffering from alcoholism, a physical and psychological dependence on alcohol.

Antabuse

A pharmaceutical drug used primarily to support the treatment of chronic alcoholism by producing an acute sensitivity to ethanol.