Carl borroowed $2,500 for six months at an annual interest rate
of 11%. How much must he repay at the end of six months?
a. $275
b. $2,637.50
c. $87.50
d. $2,762.50
First, we need to find the interest that Carl will owe after six months:
Interest = Principal x Annual Interest Rate x Time
Interest = $2,500 x 0.11 x (6/12)
Interest = $137.50
Then, we add the interest to the principal to find the total amount that Carl must repay:
Total = Principal + Interest
Total = $2,500 + $137.50
Total = $2,637.50
Therefore, Carl must repay $2,637.50 at the end of six months, which is option b.