You borrow $350 from your aunt and agree to repay her $400 in 18 months. What interest rate (to the nearest tenth) are you paying?

Question

asked Oct 17, 2019 174k views

1 Answer

Dinuda Yaggahavita · Answer 1 · 2019-10-24T01:06:33+0000

I = P*r*t
r = I/(P*t) = (400 -350)/(350*1.5) . . . . . . 18 mo = 1.5 yr
r = 1/10.5
r ≈ 9.5%

You are paying about 9.5% simple interest.