Answered: If you borrow $3,000 at 6% simple…

If you borrow $3,000 at 6% simple interest per year for seven years, how much will you have to repay at the end of seven years? (a) $3,000 (b) $4,511 (c) $1,260 (d) $1,511 (e) $4,260.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter12: Current Liabilities

Section: Chapter Questions

Problem 5Q: If Bergen Air Systems takes out a $100,000 loan, with eight equal principal payments due over the...

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Concept explainers

Cost of Credit

The cost of credit is an extra amount that the borrower has to pay besides the loan amount. These credit charges may vary from loan to loan. The cost of credit includes interest charges, maintenance charges, and arrangement charges. Some of the costs are mandatorily collected by the lender based on the loan amount and tenure of the loan. The cost of credit is also called finance charges of the credit.

Question

If you borrow $3,000 at 6% simple interest per year for seven years, how much will you have to repay at the end of seven years? (a) $3,000 (b) $4,511 (c) $1,260 (d) $1,511 (e) $4,260.

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