You just took out a $12,000 loan for your small business. The loan has

You just took out a $12,000 loan for your small business. The loan has a four year term and repayment is in the form of four equal end-of-year payments. The interest rate on the loan is 11.5%.

What is your total interest expense in the first year of the loan?
A) $1,380.00
B) $1,089.13
C) $764.81
D) $403.20
E) $2,529.29

ANSWER

A