An employee of Company x received the following loans (rate and amount) from their employer on January 1, this year:

7%, $15,000 loan to consolidate debts

5%, $100,000 loan to purchase a home

The following are the prescribed rates for this year:

Q1 8%, Q2 6%, Q3 9%, Q4 7%

The employee paid interest on the loans on January 15, of the following year.

Required: Calculate the total interest benefit (to be included in income). Ignore any leap year impacts.

Question 4 options:

Total interest as per the prescribed rates $8,627

Total interest as per the prescribed rates $8,375; total interest paid $6,050; total interest benefit $2,325

Total interest as per the prescribed rates $8,627; total interest paid $6,050; total interest benefit $2,577

Total interest as per the prescribed rates $8,375

Answer rating: 100% (QA)

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