Solve the Given Problem, Using the Formula $I = P R T :$

question 28

Multiple Choice

Solve the given problem, using the formula $I = P R T :$ Find the simple interest paid on a Ioan of $\$ 1,200$ at $8 \frac { 1 } { 4 } \%$ interest for 5 years.

• A)$49.50
• B)$4.95
• C)$495
• D)$4,950

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Definitions:

Marginal Productivity

Refers to the increase in output that arises from an additional unit of input, assuming all other factors of production remain constant.

Marginal Productivity Theory

An economic theory suggesting that payment to factors of production equates to their marginal contribution to the output.

Value Added

The increase in the value of a product or service as a result of a particular process, typically measured as the difference between the cost of inputs and the price it's sold for.

Profit-Maximizing

A strategy or point whereby a firm selects the output level at which its profits are at their highest.