Answer :
To solve for the loan amount on an interest-only loan, we can use the formula for an interest-only payment:
\[ \text{Interest Payment} = \frac{\text{Loan Amount} \times \text{Interest Rate}}{12} \]
Given that the interest payment is $800 and the annual interest rate is 5.75%, we can rearrange the formula to solve for the loan amount:
\[ \text{Loan Amount} = \frac{\text{Interest Payment} \times 12}{\text{Interest Rate}} \]
Substitute the given values:
Interest Payment = $800
Interest Rate = 5.75% or 0.0575 (when converted to decimal form)
\[ \text{Loan Amount} = \frac{800 \times 12}{0.0575} \]
\[ \text{Loan Amount} = \frac{9600}{0.0575} \]
\[ \text{Loan Amount} = 166956.52173913043 \]
Since we are looking for the closest match to the provided options for the loan amount, the closest match to $166,957 is option C. Therefore, the correct answer would be:
OC. $166,957
