Answers PERFIN Personal Finance Sem 2 26-27 Lesson 3: BankruptcyQuestion 1

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QuizMultiple Choice

Lesson 3: Bankruptcy

Question 1 • [PERFIN] Personal Finance, Sem 2 (26-27)

Tyrell has a bankruptcy on his credit report and therefore pays higher interest rates on his current loans. He calculates that the extra money he pays in additional interest each year, if invested at the rate of 2.5% for one year, could earn him simple interest totaling $300. How much does Tyrell pay in additional interest each month?

Answer

A

$90

B

$100

C

$1,000

D

$12,000

Explanation

Use the simple-interest formula I = Prt. With interest of $300, a rate of 0.025, and 1 year, the amount invested is P = 300 ÷ 0.025 = $12,000. That is Tyrell’s extra interest for the year, so per month he pays $12,000 ÷ 12 = $1,000. The correct choice is $1,000.

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