An IRS auditor visits the main offices of Sharon's Secret (SS). SS has put $150,000 into a 9 percent interest-bearing account a year ago to start a shoplifting training program for its employees. The auditor finds out that the SS account has earned interest in the amount of
A) $109,000,
B) $163,500,
C) $13,500,
D) $9,000.

Question

Quizplus · Accepted Answer

The interest earned on the account can be calculated using the formula for simple interest: Interest = Principal × Rate × Time. Here, Principal = $150,000, Rate = 9% (or 0.09), and Time = 1 year. So, Interest = $150,000 × 0.09 × 1 = $13,500.

An IRS Auditor Visits the Main Offices of Sharon's Secret