You pawn a guitar and receive $880. One month later, you get the guitar back by paying $1250. If this is simple interest, then what annual interest rate did you pay?

Question

Mathematics

Nataly Madden

5 May, 14:48

You pawn a guitar and receive $880. One month later, you get the guitar back by paying $1250. If this is simple interest, then what annual interest rate did you pay?

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Answers (1)

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Gross · Answer 1

Interest=1250-880=370

I=PRT

P=principal

r=rate in deicmal

t=time in years

1 month so t=1/12

P=880

I=370

370=880*r*1/12

370=220/3r

times both sides by 3

1110=220r

divdie both sides by 220

5.04545=r

505% interest