Question

The simple interest due on a 6-month loan of $2,500 is $125. What is the monthly payment on the loan?

$2,625

$437.50

$20.83

$416.67

Answer 1

A person borrows $2500 and they must pay this amount back, plus the $125 in simple interest. In total, they must pay back 2500+125 = 2625 dollars.

Divide this amount over 6 months
2625/6 = 437.50

The monthly payment is $437.50, so the answer is choice B