For Simple Interest Accounts, the Amount a Accumulated or Due

question 41

Multiple Choice

For simple interest accounts, the amount A accumulated or due depends on the principal p, interest rate r, and the time t in years according to the formula A = p(1 + rt) . Mary borrowed $7700 at 17.5% simple interest. If she repaid $18,749.50, what was the term of the loan?

• A) 8.0 years
• B) 8.2 years
• C) 8.4 years
• D) 8.6 years

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Definitions:

Nonprescription Drugs

Medications that can be bought without a doctor's prescription, also known as over-the-counter drugs.

Aspirin

A medication used to reduce pain, fever, inflammation, and is also used in low doses to prevent blood clots.

Deductible

Eligible expenses that can be subtracted from gross income to reduce taxable income.

Loan Fees

Charges associated with the origination, maintenance, or closure of a loan, ranging from application fees to prepayment penalties.