The Hudson Company borrowed $250,000 to purchase machinery and agreed to pay 4% interest for six years on an installment note.Each note payment is $47,690.How much interest is Hudson paying over the life of the loan?

Question

Quizplus · Accepted Answer

The total amount of payments over the life of the loan is:

$47,690 x 6 = $286,140

To determine the amount of interest paid, we subtract the amount borrowed from the total amount of payments:

$286,140 - $250,000 = $36,140

Therefore, the answer is B) $36,140.

The Hudson Company Borrowed $250,000 to Purchase Machinery and Agreed