Question

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? i know the answer but someone please tell me how to do it?

Answer 1

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.