Business FinancesQuestion 330 of 690
A contractor finances a $24,000 piece of equipment with a 4-year loan at 7% simple annual interest. What is the total interest paid over the life of the loan?
a.$1,680
b.$6,720
c.$24,000
d.$30,720
Explanation
Simple interest = Principal × Rate × Time = $24,000 × 0.07 × 4 = $6,720. The total amount repaid would be $24,000 + $6,720 = $30,720.
Practice all 690 questions free — no signup required.
Related questions on this topic
- A contractor wins a job for $300,000 and incurs total costs of $264,000. What is the profit margin on the selling price?
- A contractor wants to keep a cash reserve equal to 2 months of fixed overhead. If monthly fixed overhead is $14,000, how large should the reserve be?
- Accounts payable on a contractor's balance sheet represents:
- A contractor's progress payment application bills $80,000 of completed work. The owner withholds 10% retention. How much cash will the contractor actually receive on this payment?
- Which document collects an independent contractor's name, address, and taxpayer identification number so the payer can later issue a 1099-NEC?
- A contractor's overhead is the same each month whether it completes 2 jobs or 8 jobs. Therefore, the per-job share of overhead is LOWEST when the contractor:
Last reviewed: · editorial process
PrepPass Editorial Team · Verified against California CSLB Contractor License Law & Business Exam · How we review