On January 1, 2006, a consumer borrowed $10,000 for a term of one year at an interest rate of 12 percent.How much principal and interest will the consumer pay back on January 1, 2007?
A)$10,000
B)$1,200
C)$8,929
D)$11,200

Question

Quizplus · Accepted Answer

The consumer will pay back the original $10,000 plus 12% interest on that amount for one year. The interest is calculated as $10,000 * 12% = $1,200. Therefore, the total repayment is $10,000 + $1,200 = $11,200.

On January 1, 2006, a Consumer Borrowed $10,000 for a Term