Solve the Problem $\$ 5073$ At $4 \%$ Simple Interest for 5 Months

question 218

Multiple Choice

Solve the problem.
-Levi borrowed $\$ 5073$ at $4 \%$ simple interest for 5 months. How much will the interest amount to? What is the total amount that Levi will have to pay back at the end of 5 months? Round answers to the nearest cent if necessary.

• A) \(\$ 85.26 ; \$ 5158.26\)
• B) \(\$ 84.55 ; \$ 5157.55\)
• C) \(\$ 67.64 ; \$ 5140.64\)
• D) \(\$ 101.46 ; \$ 5174.46\)

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Definitions:

Usury Laws

Regulations governing the amount of interest that can be charged on a loan, intended to protect consumers from excessively high rates.

Loanable Funds

Financial assets available for borrowing, which play a crucial role in setting interest rates in economics.

Shortage

A scenario in which the need for a product or service surpasses the available supply within a market.

Payday Lending

A type of short-term borrowing where lenders offer high-interest loans based on the borrower's income and credit profile.