What Is the Total Amount of Interest That Will Be

question 10

Multiple Choice

What is the total amount of interest that will be paid on a five-year,$90,000 note payable at 11% simple annual interest?

• A) $1,980
• B) $9,900
• C) $49,500
• D) $139,500

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Definitions:

Return On Common Shareholders' Equity Ratio

A financial metric that measures the profitability attributable to shareholders by comparing net income to common equity.

Debt To Total Assets Ratio

A financial ratio that measures the percentage of a company's assets financed by creditors through debt, indicating financial leverage.

Leverage

The use of borrowed funds to increase the potential return of an investment.

Average Inventory

The mean value of a company's inventory over a specific period of time, used to calculate cost of goods sold and other financial metrics.