Carl is facing very difficult financial times and can only pay the interest on a $10,000 loan he has taken. The bank charges him a quarterly compound rate of 5%. What is the approximate interest he pays annually?  Choose the correct choice from the following options: A) $ 1200 B) $ 2000 C) $ 2150 D) $ 2500 E) $ 12000

Rationale: since the options did not make sense with 5 % annual rate of interest , it is apparent that the intent was a 5 % quarterly rate . so the bank charges 5 % every quarter and compounds it in the next quarter . had it been a simple quarterly rate , we would have just found 4 * 5 % of 10,000 = $ 2000 as our answer . but since , the interest is compounded , it will be a bit more than $ 2000 . option ( c ) looks correct . answer : c
Answer: C