Dan borrowed $3600 and pays a fortnightly interest of $27. Calculate the yearly interest rate?

Answer 1

To calculate the yearly interest rate, we need to know how many interest payments are made in a year.

Since Dan pays interest fortnightly, there are 26 fortnights in a year (52 weeks divided by 2).

So, the total interest paid in a year is $27 x 26 fortnights = $702.

To find the yearly interest rate, we divide the total interest paid by the amount borrowed:

Yearly interest rate = $702 / $3600 = 0.195 or 19.5%.

Therefore, the yearly interest rate is 19.5%.