Suppose That Interest Payments Are $140 Per Year on a $1,000

question 58

Multiple Choice

Suppose that interest payments are $140 per year on a $1,000 loan and $1,188 per year on an $8,485 loan. The interest rates on the two loans are

• A) 14 percent and 20 percent, respectively.
• B) 14 percent on both loans.
• C) 18.8 percent on both loans.
• D) 1.4 percent and 11.8 percent, respectively.