A Apopka startup expects to borrow $85,000 for one month on its line of credit at 7.2% annual interest. What one-month interest cost should be budgeted?
Correct Answer
A) $510.00
One-month interest equals principal multiplied by annual rate divided by 12.
Why This Is the Correct Answer
One-month interest equals principal multiplied by annual rate divided by 12.
Why the Other Options Are Wrong
Option B: $6,120.00 license setup record
$6,120.00 license setup record is above the supported result for startup borrowing cost; it likely adds an unsupported amount or compares the wrong financial base.
Option C: $7,083.33 business audit note
$7,083.33 business audit note is above the supported result for startup borrowing cost; it likely adds an unsupported amount or compares the wrong financial base.
Option D: $1,020.00 insurance evidence file
$1,020.00 insurance evidence file is above the supported result for startup borrowing cost; it likely adds an unsupported amount or compares the wrong financial base.
Memory Technique
One-Month and interest live in different drawers; Controller Estimates tells which opens.
Reference Hint
Open-book path: tab Contractor's Manual, 2025 to Startup financing and credit-line planning; verify the startup duty, registration, or financial setup before answering.
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