Hilaria borrwoed
$11000 from her grandfather to pay for college. Five years later, she paid him back the $11000 plus $1650 interest. What was the rate of simple interest?
interest per year = 1650/5 = 330
100 * (330/11000) = ???
Po*r*t = 1650.
11,000*r*5 = 1650.
r = 0.03/yr. = 3%/yr.
So APR = 3%.
To find the rate of simple interest, we can use the formula:
Simple Interest = Principal (amount borrowed) * Rate * Time
Given that Hilaria borrowed $11000 and paid back $11000 + $1650 interest, we know the time is 5 years.
Let's calculate the rate:
Simple Interest = Principal * Rate * Time
$1650 = $11000 * Rate * 5
To isolate the rate, divide both sides of the equation by ($11000 * 5):
Rate = $1650 / ($11000 * 5)
Rate = $1650 / $55000
Rate ≈ 0.03
So, the rate of simple interest is approximately 0.03, or 3%.