A company lends its CEO $150,000 for 3 years at a 6% annual interest rate.Interest payments are to be made twice a year.Each interest payment will be for:

Question

Quizplus · Accepted Answer

The annual interest rate is 6%, so the semi-annual interest rate is:

6% / 2 = 3%

The CEO borrowed $150,000, so the semi-annual interest is:

($150,000) x (3%) = $4,500

Therefore, the correct answer is C) $4,500, as the interest payments are made twice a year.

A Company Lends Its CEO $150,000 for 3 Years at a 6