Wanda takes $3,000 from her savings account that pays 5 per cent interest per year and uses the funds to purchase a computer for $3,000 for her business. At the end of the year the computer is worth $2,000. Wanda pays an implicit rental rate of _______ a year.
A) $1,150
B) $4,000
C) zero
D) $3,150

Question

Quizplus · Accepted Answer

The implicit rental rate includes the depreciation of the computer ($3,000 - $2,000 = $1,000) plus the forgone interest on the savings ($3,000 * 5% = $150). Adding these together gives $1,000 + $150 = $1,150.

Wanda Takes $3,000 from Her Savings Account That Pays 5