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2.1 Introduction to the national economy

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Question 6

A dairy processor plans to borrow £25,000 for one year at simple interest to install new cooling equipment. The equipment is expected to add £1,250 to profit before interest is paid.

At what interest rate would the interest cost of the loan be equal to the expected increase in profit?

[1]
A

0.05%

B

20%

C

5%

D

0.5%

Markscheme

2.1 Introduction to the national economy Questions

  1. GCSE
  2. /Economics
  3. /2.1 Introduction to the national economy

75 exam-style questions on AQA GCSE Economics 2.1 Introduction to the national economy, covering 2.1.1a What an interest rate is, 2.1.1b Interest rates and consumer decisions, 2.1.1c Interest rates, producer decisions and calculations, 2.1.2a UK government revenue and spending, and 2.1.2b Direct, indirect and progressive taxation. Each one has a worked solution and a mark scheme showing where the marks go.

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