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17 January, 15:12

Your bank gives you a special loan of $112,000. At the end of 30 years, you will pay the bank $176,400 in simple interest. What is the annual interest rate on your loan?

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  1. 17 January, 18:00
    0
    Interest, I = PRT/100

    R = 100I / PT.

    P = 112 000. T = 30 years. Interest = 176 400.

    R = 100 * 176 400 / (112 000 * 30)

    R = 5.25

    Rate = 5.25% per year.
  2. 17 January, 18:09
    0
    Woah

    that's alot of interest

    ok so simple interest is the same every year

    therefor if the total interest is 176400 in 30 years, then the interest for 1 ear is 176400/30=5880

    ok so now

    112000 times x%=5880

    percent means parts out of 100 so x%=x/100

    112000 times x/100=5880

    112000x/100=5880

    1120x=5880

    divide both sides by 1120

    x=5.25

    answer is 5.25%
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