Question

You take out a 60-day loan for $5000. At the end of the loan, you owe $73.97 in interest. What is the annual percentage rate? Round your answer to the nearest tenth of a percent.

Answer 1

The PERCENTAGE ANNUAL RATE is 9.0% to the nearest tenth using the SIMPLE INTEREST FORMULA

The question is related to a SIMPLE INTEREST problem:

Loan period = 60 days

using 365 days a year ;

converting to years , 60 days = (60 / 365) years

interest on loan = 73.97

principal = 5000

Using the formula:

interest = (principal * rate * time)

73.79 = (5000 * rate * (60/365)

Rate = 73.79/(5000 * (60/365)) =8.977%

rate = 9%

Therefore, PERCENTAGE ANNUAL RATE is 9.0%

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