Multiple choice

Christian obtained a certain amount of loan for the expansion of his business at a simple annual interest rate of 15 percent. After one year, he repaid the loan with a single payment of \$52,325, including the interest. Quantity A Total amount of money that Christian borrowed in the beginning Quantity B \$45,500

  1. Quantity A is greater.

  2. Quantity B is greater.

  3. The two quantities are equal.

  4. The relationship cannot be determined from the information given.
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

A = P(1 + RT/100). 52325 = P(1 + 0.15 * 1) = P(1.15). P = 52325 / 1.15 = 45500. Quantity A = 45500. Quantity B = 45500. They are equal.

AI explanation

Using the Simple Interest formula, the principal equals the total amount divided by one plus the product of the rate and time. Plugging in the numbers gives 52325 divided by (1 + 0.15 times 1), which equals 52325 divided by 1.15. This results in a beginning loan amount of $45,500, making the two quantities equal.

Keep practicing — related questions