Asked by
Hannah Oyebade
on Dec 15, 2024
Verified
On July 1, David borrowed $9,500 from his revolving line of credit. At the time the annual simple interest rate was 3.80%. On September 15, the annual interest rate was lowered to 3.60%. Determine the interest paid from July 1st to December 31st.
A) $99.62
B) $171.47
C) $180.99
D) $164.05
E) $176.22
Revolving Line of Credit
A credit facility extended by a financial institution to a customer that allows the customer to borrow up to a certain limit, pay down the balance, and then borrow again.
Simple Interest
Interest calculation method that involves multiplying the principal amount by the interest rate and the term of the loan or investment, without compounding.
Annual Rate
The interest rate for a loan or investment over a one-year period, often used to compare the yield of financial products.
- Acquire knowledge on the subject and mathematical execution of simple interest.
- Understand the impact of changing interest rates on loans and investments.
- Examine the repercussions of payments towards the principal of a loan operating under simple interest.
Verified Answer
KI
Learning Objectives
- Acquire knowledge on the subject and mathematical execution of simple interest.
- Understand the impact of changing interest rates on loans and investments.
- Examine the repercussions of payments towards the principal of a loan operating under simple interest.