You Borrow $3,500 and Will Pay Back the Entire Amount

question 5

Multiple Choice

You borrow $3,500 and will pay back the entire amount in 5 years. You are charged 9 percent interest per year. How much interest do you pay on this loan?

• A)$1,885.18
• B)$1,907.35
• C)$1,959.02
• D)$2,106.81

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Definitions:

Wage Rate

The fixed amount of compensation or payment given to an employee by an employer in return for work performed, typically expressed on an hourly, daily, or piecework basis.

Labor

Work or human effort, including physical and mental, contributed to the production of goods and services.

Leisure

Free time when one is not working or attending to other duties, often used for relaxation, entertainment, or hobbies.

Nonlabor Income

Income received that does not come from employment or work, such as investment returns or inheritance.