Question

Your friend borrows $100 from you and promises to pay you back $109 in 8 months. What annual percentage rate (A.P.R.) are you charging your friend? Round to the nearest tenth of a percent and write the answer as a decimal

Answer 1

Answer:

You are charging 13.5% annual percentage rate to your friend .

Step-by-step explanation:

Principal = $100

Amount = $109

Time = 8 months

12 months = 1 year

1 month = $\frac{1}{12} year$

8 months = $\frac{8}{12} year$

So, Time =  $\frac{8}{12} year$

SI = Amount - Principal = $109-$100=$9

Formula : $SI =\frac{P \times R \times T}{100}$

$9=\frac{100 \times R \times \frac{8}{12}}{100}$

$13.5\%=R$

Hence you are charging 13.5% annual percentage rate to your friend .