DrDrake Is Thinking About Retirement and Decides to Sail Around

question 3

Multiple Choice

Dr.Drake is thinking about retirement and decides to sail around the world once he retires.He buys a sailboat for $125,000.He borrows the money at an APR of 7.5% for five years.How much will his total interest be?

• A) $46,875.30
• B) $36,875.40
• C) $25,284.40
• D) $17,388.80

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Definitions:

Financial Reporting

The process of producing statements that disclose an organization's financial status to management, investors, and the government.

Generally Accepted Accounting Principles

The common set of accounting principles, standards, and procedures that companies use to compile their financial statements.

Profit-volume Chart

A graphical representation that shows the relationship between a business's profit and its volume of sales.

Total Fixed Cost

The sum of all costs that remain constant regardless of the level of production or business activity.