If a person is going to pay $500 per month every month for 5 years, what do you know about their car loan (if the interest rate is positive)?
A)Nothing.
B)The loan amount was more than $30,000.
C)The loan amount was exactly $30,000.
D)The loan amount was less than $30,000.

Question

Quizplus · Accepted Answer

If a person is going to pay $500 per month every month for 5 years, which is a total of 60 payments, and the interest rate is positive,it means the loan amount was less than $30,000. If the loan amount was more than $30,000, the monthly payments would be higher since the interest would add to the principle, and if the loan amount was exactly $30,000, the monthly payments would be $500 for a little more than 5 years since interest would also need to be paid.

If a Person Is Going to Pay $500 Per Month