Norman Cobb has a previous balance on his loan of $2,850 with an interest rate of 15 percent. What is the final payment if he pays
off the loan with the next payment?
a. $2885.63
b. $3277.50
c. $2850.00
d. $427.50
The final payment is calculated by adding the interest to the previous balance.
Interest = (Previous balance) * (Interest rate) = $2,850 * 0.15 = $427.50
Final payment = Previous balance + Interest = $2,850 + $427.50 = $3,277.50
Therefore, the correct answer is b. $3,277.50.