Question

Friendly Quick Loans Inc offers you 4.25 today but you must repay 5.75 when you get your paycheck in one week or else.

a) 4.25% interest rate
b) $1.50 interest
c) 1-week repayment term
d) 5.75% total repayment

Answer 1

If a loan is offered with an interest rate of 4.25% and you borrow $4.25, then the interest you would need to repay after one week is $0.18. The total amount you would need to repay is $4.43.

Step-by-step explanation:

If a loan is offered with an interest rate of 4.25% and you borrow $4.25, then the interest you would need to repay is calculated as follows:

Interest = Loan Amount × Interest Rate = $4.25 × 0.0425 = $0.18

So, the total amount you would need to repay after one week would be $4.25 (loan amount) + $0.18 (interest) = $4.43.