Assuming You Were Charged Simple Interest on a Loan of $4,900

question 72

Multiple Choice

Assuming you were charged simple interest on a loan of $4,900 which requires you to repay in one year $5,292, what rate of interest would you be charged? (Round interest rate to the nearest hundredth percent if necessary.)

• A) 9.26%
• B) 8%
• C) 7.41%
• D) 11%

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Definitions:

Compounded 12 Times Per Year

Refers to the process of applying interest to an original amount of money, with the interest being calculated and added twelve times in a year.

Compounded 365 Times Per Year

A term used in finance to indicate that interest is calculated and added to an account's balance 365 times in one year, or daily.

Composition

The process or result of combining two or more functions by applying one function to the result of the other.

\(5x+9\)

An algebraic expression representing a linear function.