Suppose you borrow $500 and agree to pay this $500 plus $75 of interest at the end of a year. The interest rate is

A) 10 percent.
B) 15.0 percent.
C) 12.50 percent.
D) 7.50 percent.

Question

Suppose you borrow $500 and agree to pay this $500 plus $75 of interest at the end of a year. The interest rate isA) 10 percent.B) 15.0 percent.C) 12.50 percent.D) 7.50 percent.

Jesselle Mendez · Accepted Answer

Final Answer : B, Explanation :  The interest rate is calculated as the interest paid divided by the principal borrowed. Here, it's $75/$500 = 0.15, or 15%.

Suppose you borrow $500 and agree to pay this $500 plus $75 of interest at the end of a year. The interest rate is

A) 10 percent.
B) 15.0 percent.
C) 12.50 percent.
D) 7.50 percent.

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Learning Objectives

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