posted by .

Barney Casey borrowed \$40,000 from his parents for 2 years. He paid them a total of \$45,000 at the end of the 2-year term of the simple interest loan. What rate of interest did he pay his parents?

I = 45000 = 40000 = \$5000.

Po*rt = I,
rt = I/Po = 5000 / 40000 = 0.125,
r = 0.125/t = 0.125 / 2 = 0.0625=6.25%.

Similar Questions

In a discount interest loan, you pay the interest payment up front. For example, if a 1-year loan is stated as \$10,000 and the interest rate is 10 percent, the borrower “pays” 0.10 x \$10,000 = \$1,000 immediately, thereby receiving …
2. Math

1. Jacksonville Technical College received \$3,445,553 in state aid on September 15 for the fall academic semester. The vice-president for finance decided to invest \$2,000,000 in a 2-month investment that pays 11.5% simple interest. …
3. Math

Tonya took out a loan to help pay for her house. She borrowed \$50,000 for 15 years at a yearly simple interest rate of 5%. How much interest will she end up paying the bank?
4. Finance

You just borrowed \$15,000 from a bank. If you pay \$4,000 at the end of each year over the next 5 years, you will pay off the loan. What is the interest rate on the loan?
5. Math Economics

1. Jacksonville Technical College received \$3,445,553 in state aid on September 15 for the fall academic semester. The vice-president for finance decided to invest \$2,000,000 in a 2-month investment that pays 11.5% simple interest. …
6. Math

. Jacksonville Technical College received \$3,445,553 in state aid on September 15 for the fall academic semester. The vice-president for finance decided to invest \$2,000,000 in a 2-month investment that pays 11.5% simple interest. …
7. Math

Tonya took out a loan to help pay for her house. She borrowed \$50,000 for 15 years at a yearly simple interest rate of 5%. How much interest will she end up paying the bank?
8. Math

Suppose you borrowed \$25,000 for a car at an APR of 8%, which you are paying off with monthly payments of \$510 for 5 years. a) What’s the loan principal?
9. math

Bill takes a lot of \$9,000 and an 8% simple interest rate for 6 years How much interest will Bill pay after 2 years?
10. Maths

Calculate the total amount (loan and interest)to be paid on a loan of N1 000.00, borrowed for 2 years at a simple interest rate of 10% p.a.

More Similar Questions