Ms. Jordan has been given a loan of $2,500 for 1 year. If the interest charged is $275, what is the interest rate on the loan?
I = P*R*T
so R = I/(PT)
Rate = 275/(2500) = .11 or 11%
check by taking 11% of $2500
To find the interest rate on a loan, you need to divide the interest charged by the principal (loan amount), and then multiply the result by 100 to get the percentage.
In this case, the loan amount (principal) is $2,500, and the interest charged is $275.
To calculate the interest rate, divide the interest charged by the loan amount:
Interest Rate = (Interest Charged / Loan Amount) * 100
Now let's plug in the values:
Interest Rate = ($275 / $2,500) * 100
Simplifying further:
Interest Rate = 0.11 * 100
Interest Rate = 11%
Therefore, the interest rate on the loan is 11%.