Question

Marcela took out a $600 discounted loan with a 4% annual interest rate over a period of 8 months. How much money does Marcela get from the bank when she receives the loan?

A. $588
B. $600
C. $604
D. $624

Answer 1

Marcela receives $584 when she receives the loan.

Step-by-step explanation:

To calculate the amount of money Marcela receives from the bank when she receives the loan, we need to subtract the interest from the principal. The interest can be calculated using the formula:

Interest = Principal * Rate * Time

In this case, Principal = $600, Rate = 4% (or 0.04 as a decimal), and Time = 8 months (or 8/12 years).

Using the formula, the interest would be: $600 * 0.04 * (8/12) = $16.

Therefore, Marcela would receive the loan amount minus the interest, which is: $600 - $16 = $584.

So, the answer is option A: $588.