Sarah is able to take out a loan for $5000 for one year at an annual interest rate of 10 percent. After calculating her return to be $450, Sarah will:
A) make $450 on net, and should take out the loan.
B) lose $450 on net, and should not take out the loan.
C) make $50 on net, and should take out the loan.
D) lose $50 on net, and should not take out the loan.

Question

Quizplus · Accepted Answer

The interest on the loan is $500 (10% of $5000). Since Sarah's return is $450, she will lose $50 on net ($450 - $500 = -$50).

Sarah Is Able to Take Out a Loan for $5000