If Mega Corp. borrows $9,000 and agrees to pay the lender $10,000 in one year, the annual interest rate on the loan is approximately _____%.

Question

Quizplus · Accepted Answer

The interest rate can be calculated using the formula: 
Interest = Principal x Rate x Time
where Principal = $9,000, Interest = $1,000, Time = 1 year
Plugging in the values, we get:
$1,000 = $9,000 x Rate x 1
Rate = $1,000/$9,000 
Rate = 0.111 or 11.1%
Therefore, the answer is choice C, 11.1%.