How much is 7 months of interest for a $200,000 loan at 5% interest?

How much is 7 months of interest for a $200,000 loan at 5% interest?

• A. $5,000
• B. $5,833
• C. $7,000
• D. $10,000

Answer: (B)

To calculate 7 months of interest on a $200,000 loan at an interest rate of 5%, you first need to determine the annual interest amount. The annual interest can be calculated using the formula: Annual Interest = Principal × Interest Rate In this case, the principal is $200,000, and the interest rate is 5%, or 0.05 when expressed as a decimal. So, the annual interest would be: Annual Interest = $200,000 × 0.05 = $10,000 Since we are interested in 7 months of interest, we need to calculate the monthly interest by dividing the annual interest by 12: Monthly Interest = Annual Interest / 12 = $10,000 / 12 ≈ $833.33 Now, to find the interest for 7 months, we multiply the monthly interest by 7: Interest for 7 months = Monthly Interest × 7 ≈ $833.33 × 7 ≈ $5,833.31 Rounding this to the nearest dollar gives us $5,833. Therefore, the total amount of interest accrued over 7 months for a $200,000 loan at 5% interest is $5,833,

To calculate 7 months of interest on a $200,000 loan at an interest rate of 5%, you first need to determine the annual interest amount. The annual interest can be calculated using the formula:

Annual Interest = Principal × Interest Rate

In this case, the principal is $200,000, and the interest rate is 5%, or 0.05 when expressed as a decimal. So, the annual interest would be:

Annual Interest = $200,000 × 0.05 = $10,000

Since we are interested in 7 months of interest, we need to calculate the monthly interest by dividing the annual interest by 12:

Monthly Interest = Annual Interest / 12 = $10,000 / 12 ≈ $833.33

Now, to find the interest for 7 months, we multiply the monthly interest by 7:

Interest for 7 months = Monthly Interest × 7 ≈ $833.33 × 7 ≈ $5,833.31

Rounding this to the nearest dollar gives us $5,833. Therefore, the total amount of interest accrued over 7 months for a $200,000 loan at 5% interest is $5,833,