Question

Rich is taking out an $8,700, 3-year loan with an APR of 2.31%. List the three variables with their corresponding values, particular to this problem.

a. Loan amount = $8,700, APR = 2.31%, Time = 3 years
b. Loan amount = $2,310, APR = 8,700%, Time = 3 years
c. Loan amount = $3,100, APR = 2.31%, Time = 8,700 years
d. Loan amount = $8,700, APR = 3 years, Time = 2.31%

Answer 1

The correct variables for Rich's loan are loan amount = $8,700, APR = 2.31%, and time = 3 years. These reflect the principal, the annual cost of borrowing, and the loan term respectively.

Step-by-step explanation:

The correct choice that lists the three variables with their corresponding values is:

a. Loan amount = $8,700, APR = 2.31%, Time = 3 years

When dealing with loans, the principal amount, the annual percentage rate (APR), and the time period over which the loan is to be repaid are the key variables.

In this case:

The loan amount Rich is taking out is $8,700.

The APR on the loan is 2.31%, which indicates the cost of borrowing the money annually.

The time for which the loan is taken out is 3 years.