You agree to lend ________ to a friend for a year at an annual interest rate of 10%. At the end of the year your friend pays you $500 in interest.

A) $50
B) $550
C) $5,000
D) $5,500

Question

You agree to lend ________ to a friend for a year at an annual interest rate of 10%. At the end of the year your friend pays you $500 in interest.A)  $50B)  $550C)  $5,000D)  $5,500

CLAUDIA MARCELA ATEHORTÚA GALLO · Accepted Answer

Final Answer : C, Explanation :  The interest paid is calculated using the formula Interest = Principal × Rate × Time. Given the interest is $500 at a rate of 10% for 1 year, the principal amount (the amount lent) is found by rearranging the formula to Principal = Interest / (Rate × Time) = $500 / (0.10 × 1) = $5,000.

You agree to lend ________ to a friend for a year at an annual interest rate of 10%. At the end of the year your friend pays you $500 in interest.

A) $50
B) $550
C) $5,000
D) $5,500

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Learning Objectives

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