Drive with Us is an automobile retailer and pays floor plan financing to finance the cars they hold in inventory. If the interest rate on their floor plan financing is 5 percent, how much do they pay in interest per day on a car with a wholesale price of $40,000?

Question

Quizplus · Accepted Answer

To calculate the daily interest payment for one car we need to follow the steps:
1. Convert the annual interest rate to a daily rate: 5% / 365 days = 0.0137% per day
2. Calculate the daily interest payment: $40,000 x 0.0137% = $5.48
Therefore, the answer is C, $5.48.

Drive with Us Is an Automobile Retailer and Pays Floor