A Firm Has a Line of Credit and Borrows $25,000

question 126

Multiple Choice

A firm has a line of credit and borrows $25,000 at 9 percent interest for 180 days or half a year. What is the effective rate of interest on this loan if the interest is paid in advance?

• A) 4.7 percent
• B) 9.4 percent
• C) 9.9 percent
• D) 10.3 percent

---

Definitions:

Rational

Based on or in accordance with reason or logic, capable of reasoning or using reason in an orderly cogent fashion.

Difficult

Describes something that is not easy to do, understand, or deal with.

Conduct Disorder

A mental health disorder seen in children and adolescents, characterized by a persistent pattern of behavior that violates societal norms and the rights of others.

Cognitive Factors

Elements of thought and mental processes that influence perception, memory, problem-solving, and decision-making.