. Compute the rate for the following loan. Round your answer to the nearest tenth of a percent.

Principal
Rate (%)
Time
Interest

$50,000

9 months
$4,500


(Points : 2)

1 answer

Are we doing simple interest?

notice your data did not line up nicely, do we have

principal = $50000
rate = ????
time = 9 months
interest = $4500 ?

rate = interest/(principal x time)
= 4500/(50000(9/12)) = .12

So the simple interest rate is 12% per annum