Question

match the terms to the correct components in the question above.
principal a. $5,000
interest rate b. 8%
term of loan c. 5 years
interest paid d. $7,000
total amount repaid e. $2,000

Explanation:

• Principal: The initial amount of money borrowed (or invested), here $5,000 (a).
• Interest Rate: The percentage charged (or earned) on the principal, here 8% (b).
• Term of Loan: The time period for the loan, here 5 years (c).
• Interest Paid: The amount of interest accumulated, calculated as total amount repaid - principal. If principal is $5,000 and total is $7,000, interest is $2,000 (e).
• Total Amount Repaid: Principal + Interest, so $5,000 + $2,000 = $7,000 (d).

Answer:

principal - a. $5,000
interest rate - b. 8%
term of loan - c. 5 years
interest paid - e. $2,000
total amount repaid - d. $7,000