Question

Morris Law Firm is borrowing $10,000 at 6% interest for one year. The $10,000 is the A. proceeds. B. principal. C. amount of interest. D. net amount.

Answer 1

Answer: B
$10,000 is the principal amount.

Answer 2

B

Explanation:

If Morrs Law firm is borrowing he then pays 6% on top of the $10000 they borrowed for the year. The $10000 is the initial amount and interest is paid on it which makes it the principal amount borrowed as the amount of interst can be determined as:

`10000\cdot0.06=600`

and the net amount is 10000+600=10600