Peabody Books Inc.wishes to borrow $182,000 today for the purchase of publishing materials.They have an agreement with their commercial banker that they can borrow money at an annual rate of 4.75%.How much will the firm owe if they repay the loan in exactly one year?
A)$8,645
B)$173,747.02
C)$182,000
D)$190,645

Question

Quizplus · Accepted Answer

To calculate the amount owed in one year, you multiply the principal amount by the interest rate and then add the principal back. $182,000 * 4.75% = $8,645 (interest for one year). So, $182,000 + $8,645 = $190,645.