The amount of interest owed on a loan of $40,000 after a year at an interest rate of 4 percent is:
A) $1,600.
B) $41,600.
C) $40,400.
D) $160.

Question

Quizplus · Accepted Answer

To find the amount of interest owed, we need to multiply the principal amount of $40,000 by the interest rate of 4% and the time period of one year:

$40,000 x 0.04 x 1 = $1,600

Therefore, the amount of interest owed on the loan after one year is $1,600.

The Amount of Interest Owed on a Loan of $40,000