Question

select the correct answer.
andy has a credit rating of 800, and mia has a credit rating of 585. they both apply for the same loan amount from newton bank. the bank approves
andys loan at 6.5%, and mia is charged 4 percentage points more because of her lower credit rating. what interest rate does mia have to pay?
o a. 2.5%
o b. 4.0%
o c. 6.9%
o d. 10.5%
o e. 11.25%

Explanation:

Step1: Analyze the given information

Andy's interest rate is \(6.5\%\), and Mia is charged \(4\) percentage points more.

Step2: Calculate Mia's interest rate

To find Mia's interest rate, we add the \(4\) percentage - point increase to Andy's interest rate.
The formula is \(r = 6.5\%+4\%\)

$$r=(6.5 + 4)\%=10.5\%$$

Answer:

D. 10.5%