acquiring resources math quiz\nquestion 5 of 10: you get a $60,000 loan for a new dump truck. with the…

acquiring resources math quiz\nquestion 5 of 10: you get a $60,000 loan for a new dump truck. with the truck, you can generate $500 more business each week at 80% margin. your interest rate on the loan is 8.6%. does the additional margin generated cover the interest payments?\n a) yes\n b) no

acquiring resources math quiz\nquestion 5 of 10: you get a $60,000 loan for a new dump truck. with the truck, you can generate $500 more business each week at 80% margin. your interest rate on the loan is 8.6%. does the additional margin generated cover the interest payments?\n a) yes\n b) no

Answer

Explanation:

Step1: Calculate weekly interest payment

The annual interest rate is $r = 8.6%=0.086$. The loan amount is $P = 60000$. The annual interest is $I_{annual}=P\times r=60000\times0.086 = 5160$. The weekly interest payment $I_{weekly}=\frac{I_{annual}}{52}=\frac{5160}{52}\approx99.23$.

Step2: Calculate weekly additional margin

The additional business per - week is $500$ and the margin is $80% = 0.8$. The weekly additional margin $M = 500\times0.8=400$.

Step3: Compare margin and interest

Since $400>99.23$, the additional margin generated covers the interest payments.

Answer:

A. Yes