Question

You have a loan for $1,000.00 at 7.65% APR. $100.00 of the loan is due each month and there is a penalty of 2% on the original amount when not paid. If you do not pay anything on the loan during the year and assuming there is no compounding, how much will you owe in total?
(1 point)
Responses

$1,316.50
$1,316.50

$1,096.50
$1,096.50

$1,100.50
$1,100.50

$1,078.50

Answer 1

Interest = 1000 × 7.65% = $76.50
Penalty = 1000 × 2% = $20.00
Total owed = 1000 + 76.50 + 20 = $1,096.50

Answer: $1,096.50