A physician obtained a 10-month loan for $50,000 to buy office equipment at an annual simple interest rate of 8.95%. The simple interest on the loan is $5900. Identify a. the principal, b. the interest, c. the interest rate, and d. the time period of the loan.

Question

Quizplus · Accepted Answer

a. The principal is $50,000, which was the loan amount obtained by the physician.
b. The interest is given as $5900, which was the simple interest on the loan.
c. The interest rate is 8.95%, which was the annual simple interest rate charged on the loan.
d. The time period of the loan is 10 months, which is the duration for which the physician obtained the loan. 
Therefore, the best choice is B as it correctly identifies all the given values.

A Physician Obtained a 10-Month Loan for $50,000 to Buy