Von Hayek's Kayaks can borrow $12,500 for 60 days at a cost of $220 interest. What is the effective rate of interest?
A) 8.3%
B) 9.8%
C) 10.6%
D) 1.8%

Name: Von Hayek's Kayaks can borrow $12,500 for 60 days at a cost of $220 interest. What is the effective rate of interest? A) 8.3% B) 9.8% C) 10.6% D) 1.8%
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Question

Quizplus · Accepted Answer

The effective rate of interest is calculated as (Interest/Principal) * (365/Days) * 100. Here, it is ($220/$12,500) * (365/60) * 100 = 10.6%.

Von Hayek's Kayaks Can Borrow $12,500 for 60 Days at a Cost