Business and finance. 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?
275 / 2500 = ?
Change the decimal to a percent to find the interest rate.
To find the interest rate on the loan, you can divide the amount of interest charged ($275) by the principal amount of the loan ($2,500), and then multiply the result by 100 to express it as a percentage.
The formula to calculate the interest rate is:
Interest Rate = (Interest / Principal) * 100
Plugging in the given values:
Interest Rate = ($275 / $2,500) * 100
Calculating the interest rate:
Interest Rate = 0.11 * 100 = 11%
Therefore, the interest rate on the loan is 11%.