Question

Question 4 of 10

Maxine took out a loan for $3200 at 8% interest, compounded annually. If she
makes yearly payments of $250, will she ever pay off the loan?
A. No, because $250 is less than the amount of interest she is
charged per year.
B. Yes, because $250 is less than the amount of interest she is
charged per year.
C. Yes, because $250 is greater than the amount of interest she is
charged per year.
D. No, because $250 is greater than the amount of interest she is
charged per year.

Answer 1

The answer is A because 8% interest of 3200 would be $256 annually.