Asked by Brian
A man collected $28500 on a loan of $25000 he made 4 years ago. If he charged simple interest, what was the yearly interest rate?
Answers
Answered by
MathMate
The simple interest formula is
Final amount, A
= P(1+nr)
where P is the principal, n=number of periods (years), and r is the interest rate per annum (5% would be written as 0.05).
Substituting the given values,
28500=25000(1+4r)
Solve for r and convert to percent.
Final amount, A
= P(1+nr)
where P is the principal, n=number of periods (years), and r is the interest rate per annum (5% would be written as 0.05).
Substituting the given values,
28500=25000(1+4r)
Solve for r and convert to percent.
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