Final answer:
The Watertown Bank lent Sandy's Pastry Store $40,000 at a 7% interest rate for a 4-month period.
Step-by-step explanation:
The subject of this question is Business as it pertains to banking and loans.
A bank lending money to a borrower is a common transaction in the banking industry. In this case, the Watertown Bank lends Sandy's Pastry Store $40,000 at a 7% interest rate for a 4-month period. This means that Sandy's Pastry Store will borrow $40,000 from the bank and will have to pay back the loan amount plus 7% interest within 4 months.
For example, if the borrowed amount is $40,000, the interest on the loan would be $40,000 * 7% = $2,800. So, the total amount to be repaid by Sandy's Pastry Store at the end of the 4-month period would be $40,000 + $2,800 = $42,800.