Danny Joe borrows $10,500 from the bank at 11 percent annually compounded interest to be repaid in six equal annual installments. The interest paid in the first year is ________.
A) $1,155
B) $2,481
C) $ 144
D) $1,327

Question

Quizplus · Accepted Answer

The interest paid in the first year is calculated on the initial loan amount. Since the interest rate is 11 percent annually, the interest for the first year is 11% of $10,500, which is $1,155.

Danny Joe Borrows $10,500 from the Bank at 11 Percent