The total amount of interest on a loan of $6,000 for 150 days is 210.50.Using the ordinary interest method,what is the rate of interest on this loan?Round answer to the nearest hundredth.
I know the ordinary interest method is 360 days.
My anwser is 8.42%
Could someone check this and let me know if I am correct
looks right, I got the same answer
I am not a tutor
Thank-You
To find the rate of interest on a loan using the ordinary interest method, we need to use the formula:
Interest = Principal * Rate * Time
In this case, the principal is $6,000, the time is 150 days, and the interest is $210.50. We can plug these values into the formula and solve for the rate:
$210.50 = $6,000 * Rate * (150/360)
To isolate the rate, divide both sides of the equation by $6,000 * (150/360):
Rate = $210.50 / ($6,000 * (150/360))
Simplifying this expression:
Rate = $210.50 / ($6,000 * 0.4167)
Rate = $210.50 / $2,500
Rate = 0.0842
To express the rate as a percentage, we multiply by 100:
Rate = 0.0842 * 100
Rate = 8.42%
So your answer of 8.42% is correct.