Question

Pace Co. borrowed $25,000 at a rate of 7.25%, simple interest, with interest paid at the end of each month. The bank uses a 360-day year. How much interest would Pace have to pay in a 30-day month

Answer 1

(A) $151.05 interest would Pace have to pay in a 30-day month.

What is simple interest?

• Simple interest is a quick and straightforward way to calculate the interest on a loan.
• Simple interest is calculated by multiplying the daily interest rate by the principle multiplied by the number of days between payments.
• Simply multiply the principal amount by the interest rate and the time to calculate simple interest.
• "Simple Interest = Principal x Interest Rate x Time," the formula says.

To find how much interest would Pace have to pay in a 30-day month:

• = 25,000/100 × 7.25
• = $1812.5 ÷ 12
• = $151.05

Therefore, (A) $151.05  interest would Pace have to pay in a 30-day month.

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The complete question is given below:
Pace Co. borrowed $25,000 at a rate of 7.25%, simple interest, with interest paid at the end of each month. The bank uses a 360-day year. How much interest would Pace have to pay in a 30-day month?

(A) $151.05

(B) $182.72

(C) $175.19

(D) $135.94

(E) $138.96