Question

suppose that you borrowed 2000 from a friend and promise to pay back 3600 in 4 years. What simple interest rate will you pay?

Answer 1

The simple interest rate that the money would be paid is 20%

Simple interest

From the question, we are to determine the interest rate that the money would be paid

Using the formula for simple interest,

S.I = PRT/100

Where S.I is the simple interest

P is the principal

R is the rate

and T is the time

From the given information,

P = 2000

S.I = Amount - Principal = 3600 - 2000 = 1600

R = ?

T = 4

Putting the parameters into the equation, we get

1600 = (2000 ×R × 4) / 100

1600 = 20 × R × 4

1600 = 80R

R = 20%

Hence, the simple interest rate that the money would be paid is 20%

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