To find out at which interest rate the bank makes the most money, we need to examine the total amount paid at each interest rate. We will look at the total payments for each interest rate and identify the highest one.
The table provides the total payments for a [tex]$10,000 loan over five years at different interest rates:
- At 5% interest, the total paid is $[/tex]11,322.00.
- At 10% interest, the total paid is [tex]$12,750.00.
- At 15% interest, the total paid is $[/tex]14,274.00.
- At 18% interest, the total paid is [tex]$15,234.00.
Now, we compare these total payments to determine which interest rate yields the highest total payment:
- $[/tex]11,322.00 at 5% interest
- [tex]$12,750.00 at 10% interest
- $[/tex]14,274.00 at 15% interest
- [tex]$15,234.00 at 18% interest
The highest total paid is $[/tex]15,234.00, which corresponds to the 18% interest rate. Therefore, the bank makes the most money (and takes the most risk) with an interest rate of 18 percent.
So, the answer is:
18 percent.
