Erin borrowed $18,000 to buy a car. Her loan will be paid off in 5 years. By the time that she pays off the loan, she will have made $20,327 in payments. Why did she have to pay $2,327 more than the price of the car?
(A) She had to pay interest of $2,327 for the privilege of borrowing the creditor of $18,000.
(B) She had to pay interest of $2,327 for the privilege of borrowing the principal of $18,000.
(C) She had to pay the principal of $2,327 for the privilege of borrowing the mortgage of $18,000.
(D) She had to pay a default of $2,327 for the privilege of borrowing the principal of $18,000.
Ans: (B) She had to pay interest of $2,327 for the privilege of borrowing the principal of $18,000.
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