Assume You Borrow $5,000 Today and Pay Back the Loan

question 80

Multiple Choice

Assume you borrow $5,000 today and pay back the loan in one lump sum four years from today. You are charged 8 percent interest per year. What amount will you pay back and how much interest will you pay?

• A) $6,399.56, $1,399.56
• B) $6,508.21, $1,508.21
• C) $6,802.44, $1,802.44
• D) $7,902.11, $2,902.11

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