Question

Kathy borrowed $1,550 for four months at an annual rate of 8.2% undera single-payment plan. How much interest must she pay?a. $42.37b. $1,564.53c. $116.25d. $52.32

Answer 1

The annual interest rate is 8.2%.

Hence,

the four-month interest rate will be:

$\frac{8.2}{3}=2.73\%$

In decimal, that is 0.0273

Let's calculate 2.73% of $1550. Shown below:

$1550\times0.0273=42.32$

The closest answer choice, is Answer Choice "A".

Thus,

Kathy needs to pay $42.37 in interest.

AnswerA