Mr. Velez borrowed $16,800 for 54 months at simple interest to pay for a new swimming pool. If Mr. Velez paid the bank a total of $26,854.80, what was the simple interest rate of the loan?

Question

Mathematics

Travis Hebert

14 June, 08:54

Mr. Velez borrowed $16,800 for 54 months at simple interest to pay for a new swimming pool. If Mr. Velez paid the bank a total of $26,854.80, what was the simple interest rate of the loan?

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Answers (1)

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Sumo · Answer 1

Answer:the simple interest rate of the loan is 13.3%

Step-by-step explanation:

The formula for determining simple interest is expressed as

I = PRT/100

Where

I represents interest paid on the loan.

P represents the principal or amount taken as loan

R represents interest rate

T represents the duration of the loan in years.

From the information given,

P = $16,800

R = ?

T = 54 months = 54/12 = 4.5 years

I = 26854.80 - 16800 = $10054.8

Therefore

10054.8 = (16800 * R * 4.5) / 100

10054.8 = 756R

R = 10054/756

R = 13.3%