Question

Zebedee takes out a discounted loan for $2,500 for a duration of 12 months, but only receives $2,350 into his bank account. What's the simple interest rate on the loan?

Answer 1

Simple Interest = $145.83

Answer 2

Answer: Simple interest rate is 6%.

Step-by-step explanation:

Since we have given that

Principal = $2500

Number of months = 12

Interest = $2500-$2350 =$150

As we know the formula for "Simple interest":

$Interest=\dfrac{P\times R\times T}{100}\\\\150=\dfrac{2500\times 1\times R}{100}\\\\150\times 100=2500\times R\\\\15000=2500\times R\\\\R=\dfrac{15000}{2500}\\\\R=6\%$

Hence, Simple interest rate is 6%.