Paul borrowed $200 to be repaid in one year. He paid 10% interest and a service charge of $3.00. What is his finance charge?

Question

Quizplus · Accepted Answer

The interest on the loan is calculated by taking 10% of the initial loan amount:

10% of $200 = $20

Then the finance charge is calculated by adding the interest to the service charge:

$20 + $3 = $23

Therefore, the finance charge for the loan is $23. Answer C is the correct choice.

Paul Borrowed $200 to Be Repaid in One Year