Cassady, Inc. borrowed $5,000 for 3 months at an APR of 10%. The amount of interest paid on this loan was:

Name: Cassady, Inc. borrowed $5,000 for 3 months at an APR of 10%. The amount of interest paid on this loan was:
Brand: Quizplus
Rating: 4.7 (50 reviews)

Question

Quizplus · Accepted Answer

The interest can be calculated using the formula: Interest = Principal x Rate x Time. Here, the principal is $5,000, the annual rate is 10% (or 0.10), and the time is 3/12 of a year. So, Interest = $5,000 x 0.10 x (3/12) = $125.