Final answer:
Eric will incur $1,880.21 in interest on a $23,000 loan with a 7% annual interest rate over 14 months, according to the simple interest formula. None of the given multiple-choice answers match the calculated interest, suggesting a possible error in the question options or missing details that might affect the calculation such as specific repayment terms.
Step-by-step explanation:
To calculate the interest Eric will pay on a loan of $23,000 with an annual interest rate of 7% over 14 months, we need to use the simple interest formula, which is Interest = Principal × Rate × Time. First, we need to convert the time from months to years by dividing by 12: 14 months / 12 months/year = 1.1667 years. Next, we calculate the interest:
Interest = $23,000 × 7% × 1.1667 years
Interest = $23,000 × 0.07 × 1.1667
Interest = $1,880.21
Since only options a-d are provided and none of them match the calculated value, let's double-check for any possible mistake. If we use the same approach as depicted in the example with longer timeframes, such as the 15-year loan or the 30-year mortgage from LibreTexts™, then the monthly payment would have been crucial in knowing exactly how much interest is accrued. But since this is a simple interest calculation for a shorter period (14 months), the monthly payments do not affect the interest calculation in this case.
We might consider that the question may have a typo regarding the interest rate or time, or there might be missing information that would align the calculated interest with one of the given options. Without additional data, we would have to conclude that the correct interest amount based on the given information does not match any of the provided choices.