Calculate the Profit for the Year If Capital at the Beginning

question 21

Multiple Choice

Calculate the profit for the year if capital at the beginning is $45,000, capital at the end is $40,000 and during the year the owner withdrew $15,000.

• A)$5,000.
• B)$15,000.
• C)$10,000.
• D)$20,000.

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Definitions:

Effective Interest Rate

The real rate of interest earned or paid on an investment, loan, or other financial product, taking into account the effects of compounding.

Bank Loan

Money lent to an individual or business by a bank, typically requiring repayment with interest.

Interest Charged

The cost incurred for borrowing money, typically expressed as an annual percentage rate of the principal.

Interest Expense

The cost incurred by an entity for borrowed funds over a period, reflecting the interest payable on any type of debt.