Question

Find the annual rate (written as a percent) on a loan of $1950 for 2 years and 9 months if the simple interest earned is $321.75

Answer 1

6%

Explanation:

Given that :

Principal , P = $1950

Interest earned, I = $321.75

Period, t = 2 years 9 month = 2 9/12 = 2.75

I = P * r * t

321.75 = 1950 * r * 2.75

321.75 = 5362.5 * r

r = 321.75 / 5362.5

r = 0.06

r = 0.06 * 100% = 6%