Solve the Problem

question 122

Multiple Choice

Solve the problem. Use an annual percentage rate table if necessary.
-Sarah Yost took out a 48-month fixed installment loan of $20,000 to open a gift shop. She began making monthly payments of $507.25. Sarah's business does better than expected and instead of
Making her 36th payment, Sarah decides to repay her loan in full. How much interest will Sarah
Save (use the actuarial method) ?

• A)$332.29
• B)$290.89
• C)$317.33
• D)$334.79

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Definitions:

Quantity Supplied

The total amount of a good or service that producers are willing and able to sell at a specific price over a given period of time.

Quantity Demanded

The combined quantity of a product or service that consumers are inclined and ready to purchase at an identified price.

Excess Demand

A market condition where the quantity demanded of a product exceeds the quantity supplied at a given price, leading to upward pressure on prices.

Selection Bias

Selection bias occurs when the sample used is not random.