BarLey Inc. recently borrowed $125,000 from its bank at a simple interest rate of 12 percent. The

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Question:

BarLey Inc. recently borrowed $125,000 from its bank at a simple interest rate of 12 percent. The loan is for one year and, according to the loan agreement, the interest should be added to the amount borrowed and the total amount to be repaid in monthly installments. The loan's monthly payments are:

a. $11,667.

b. $12,222.

c. $11,111.

d. $11,997.

e. $12,677.