James used $250,000 from his savings account that paid an annual interest of 15% to purchase a hardware store.After one year,James sold the business for 320,000.His accountant calculated his profit to be:

Question

Quizplus · Accepted Answer

The profit is the difference between the selling price and the cost of the business, which includes the initial investment and the interest earned on the savings account. The interest earned on the savings account is $250,000 x 15% = $37,500. Therefore, the cost of the business is $250,000 + $37,500 = $287,500. The profit is $320,000 - $287,500 = $32,500.

James Used $250,000 from His Savings Account That Paid an Annual