What is the annual rate of interest being charged on a 9-month note receivable of $50,000 if the total interest is $3,000?
A) 6%
B) 8%
C) 12%
D) 10%

Question

Quizplus · Accepted Answer

First, we need to calculate the monthly interest rate by dividing the total interest by the number of months: 
$3,000 ÷ 9 months = $333.33 per month.

Then, we can calculate the annual interest rate by multiplying the monthly interest rate by 12: 
$333.33/month x 12 months/year = $3,999.96/year

To find the rate as a percentage, we divide the interest by the principal and multiply by 100: 
($3,999.96/$50,000) x 100 = 8%

Therefore, the annual rate of interest being charged on the 9-month note receivable is 8%.

What Is the Annual Rate of Interest Being Charged on a 9-Month