Solve the Problem

question 67

Multiple Choice

Solve the problem. Round to the nearest cent as needed.
-A bank has $750,000 to lend for 7 months. It can lend it to a local contractor at a simple interest rate of 12%, or it can lend it to a small business that will pay 12% compounded monthly. If the bank wants to maximize its
Interest earned, who should receive the loan (contractor or business) and what is the additional interest earned?

• A) Contractor; $52,500
• B) Business; $1601.51
• C) Contractor; $1601.51
• D) Business; $54,101.51

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Definitions:

U.S. Senators

Elected representatives in the United States Senate, one of the two chambers of the U.S. Congress.

Canadian Goose

A large wild goose species with a distinctive black head and neck, white cheeks, and a brown body, native to arctic and temperate regions of North America.

Quotients

The results of dividing one quantity by another.

Ratios

A mathematical expression that compares two or more numbers, showing the relative size of one quantity to another.