Suppose Paul borrows $4,000 for one year from his grandfather who charges Paul 7% interest. At the end of the year Paul will have to repay his grandfather:
A) $4,280
B) $4,290
C) $4,350
D) $4,820

Question

Quizplus · Accepted Answer

To find how much Paul has to repay after a year, we need to add the interest charged by his grandfather to the original amount borrowed.
Interest = Principal x Rate x Time
Here, Principal = $4,000, Rate = 7% = 0.07, Time = 1 year
Therefore, Interest = $4,000 x 0.07 x 1 = $280
So, the total amount Paul has to repay = $4,000 + $280 = $4,280.
Hence, the answer is A) $4,280.

Suppose Paul Borrows $4,000 for One Year from His Grandfather