Assume you borrow $30,000 at an interest rate of 5.35 percent. The terms stipulate that the principal is due in full in 5 years and interest is to be paid annually at the end of each year. How much total interest will you pay on this loan assuming you pay as agreed?

Question

Quizplus · Accepted Answer

Total interest paid can be calculated using the formula: 
Total interest = principal x rate x time

Here, principal = $30,000, rate = 5.35%, and time = 5 years.

So, total interest = $30,000 x 0.0535 x 5 = $8,025.

Therefore, the correct answer is option C.

Assume You Borrow $30,000 at an Interest Rate of 5