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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Definitions:

Red Income

This term is also not recognized in standard economic discussions and might be used in a specific context that is not universally defined.

Ambrosia

Often referred to in ancient texts, ambrosia is described as a divinely nourishing substance associated with immortality.

Blue Income

Similar to "Red Income," this term does not have a recognized definition in economics and likely pertains to a specific, non-standard use.

Ambrosia

In mythology, it is the food or drink of the gods, thought to confer immortality, but in a general context, it refers to something very pleasing to taste or smell.