Steven Is Beginning a New Job but Has Not Yet

question 41

Multiple Choice

Steven is beginning a new job but has not yet been paid.He needs $400 to pay his rent this month.Steven is going to borrow the money through a Payday Loan establishment.They are charging him an $80 fee to borrow the money for 10 days until he receives his first paycheck.What is the actual interest rate that Steven is being charged?

• A)7.3%
• B)73.0%
• C)730.0%
• D)0.073%
• E)None of the above

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Definitions:

Net Income

The total earnings of a company after subtracting all expenses, including taxes and operational costs, from its total revenue.

Preferred Dividends

Preferred dividends are payments made to preferred shareholders before any dividends are paid to common shareholders, usually fixed and based on a percentage of the par value of the shares.

Accounts Receivable Turnover

A financial ratio indicating how many times a company collects its average accounts receivable balance in a period.

Net Sales

The total revenue from sales of goods and services, after deducting returns, allowances for damaged or missing goods, and any discounts allowed.