Suppose You Lend $2,500 at 11

question 61

Multiple Choice

Suppose you lend $2,500 at 11.5% for 3 years.If the interest is compounded annually,how much interest will you receive in those 3 years?

• A) $862.50
• B) $965.49
• C) $3,362.50
• D) $2,465.49

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Definitions:

Stockholders

Individuals or institutions that own at least one share of a company's stock, essentially owning a portion of the company.

Tax Deductible

Refers to expenses that can be subtracted from gross income to determine taxable income, thereby reducing the overall tax liability.

Interest Expense

The cost incurred by an entity for borrowed funds, including loans, bonds, or lines of credit.

Debt-to-Equity Ratio

It's a ratio that signifies the proportional use of debt and shareholders' equity in the acquisition of company assets.