Sets L and M are defined as follows.
1 answer:
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Answer:
C. $144,200
Step-by-step explanation:
We have been given that a borrower's monthly interest payment on an interest-only loan at an annual interest rate of 7.3% is $877.
To find the loan amount, we will use simple interest formula.
, where,
I = Amount of interest,
P = Principal amount,
r = Annual interest rate in decimal form,
t = Time in years.
One month will be equal to 1/12 year.
Upon substituting our given values in simple interest formula, we will get:
Upon rounding to nearest hundred, we will get:
Therefore, the loan amount was $144,200 and option C is the correct choice.