On the Day You Enter College You Borrow $12,000 from Your

question 244

Multiple Choice

On the day you enter college you borrow $12,000 from your local bank. The terms of the loan include an interest rate of 5.45%. The terms stipulate that the principle is due in full one year after
You graduate. Interest is to be paid annually at the end of each year. Assume that you complete
College in four years. How much will you pay the bank one year after you graduate?

• A) $2,806.27
• B) $3,419.59
• C) $12,000.00
• D) $12,654.00
• E) $15,646.39