Question

Norwood borrows $200,000 cash from a bank. If he pays back $50,000 in the first month, $30,000 in the second month, and the rest in the third month, how much does he pay in the third month?

a) $70,000
b) $100,000
c) $120,000
d) $150,000

Answer 1

Norwood pays the bank $120,000 in the third month after subtracting the first and second months' payments from the original loan amount.

Step-by-step explanation:

Norwood borrows $200,000 cash from a bank. To find out how much Norwood pays in the third month after paying back $50,000 in the first month and $30,000 in the second month, we need to subtract these amounts from the original loan.

First month's payment: $50,000
Second month's payment: $30,000

Amount paid in the first two months:
$50,000 + $30,000 = $80,000

Remaining balance after the first two months:
$200,000 - $80,000 = $120,000

Therefore, Norwood pays $120,000 in the third month, which corresponds to option c.