Solve the Problem

question 16

Multiple Choice

Solve the problem. Round to the nearest cent as needed.
-A bank has $750,000 to lend for 7 months.It can lend it to a local contractor at a simple interest rate of 12%,or it can lend it to a small business that will pay 12% compounded monthly.If the bank wants to maximize its interest earned,who should receive the loan (contractor or business) and what is the additional interest earned?

• A)Contractor; $52,500
• B)Business; $1601.51
• C)Contractor; $1601.51
• D)Business; $54,101.51

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