dr johnson wants to borrow 450,000 to build a drive thru optometry clinic. if the doctor can pay no more than 42,750 a year in interest, what is the max interest rate he can afford to pay on his loan?

Answer 1

To determine the maximum interest rate the doctor can afford to pay on his loan, we divide the maximum yearly interest payment by the total loan amount and multiply by 100 to convert it into a percentage.

Max interest rate = (Max yearly interest payment / Loan amount) * 100
Max interest rate = (42,750 / 450,000) * 100
Max interest rate = 0.095 * 100
Max interest rate = 9.5%

Therefore, the maximum interest rate the doctor can afford to pay on his loan is 9.5%.