Answer:
$671.
Step-by-step explanation:
We are asked to find amount of monthly interest on a loan amount of $115,000 with an APR of 7%.
[tex]I=Prt[/tex], where,
I = Amount of interest,
P = Principal amount,
r = Annual interest rate in decimal form,
t = Time in years.
First of all, we need to convert our given rate in decimal form and time in years as:
[tex]7\%=\frac{7}{100}=0.07[/tex]
1 month = 1/12 year
[tex]I=\$115,000\times 0.07\times \frac{1}{12}[/tex]
[tex]I=\$9583.333\times 0.07[/tex]
[tex]I=\$670.833\approx \$671[/tex]
Therefore, the monthly interest is $671 and option B is the correct choice.
