Loan Amount: $13,000
Method of payment: discount basis
Amount of Interest: $625
Term of loan: 1 year
Effective Rate of Interest (to the nearest tenth): _____ %
The correct answer is 4.8 :)
625 = x (13,000)
x = 0.048076
100 x = percent = 4.8% etc
To calculate the Effective Rate of Interest (to the nearest tenth), you need to know the loan amount, the amount of interest, and the term of the loan.
Given:
Loan Amount: $13,000
Amount of Interest: $625
Term of Loan: 1 year
To find the effective rate of interest, we can use the following formula:
Effective Rate of Interest = (Interest / Loan Amount) * (365 / Term of Loan)
Substituting the given values into the formula:
Effective Rate of Interest = ($625 / $13,000) * (365 / 1)
Calculating:
Effective Rate of Interest = (0.048076923) * (365)
Effective Rate of Interest ≈ 17.5%
Therefore, the Effective Rate of Interest (to the nearest tenth) for this loan is approximately 17.5%.
To calculate the effective rate of interest on a loan, we need to use the formula:
Effective Rate of Interest = (Interest / Loan Amount) * (365 / Term of Loan) * 100
In this case, we are given the loan amount of $13,000, the amount of interest $625, and the term of the loan is 1 year. Let's substitute the values into the formula to calculate the effective rate of interest.
Effective Rate of Interest = (625 / 13000) * (365 / 1) * 100
First, divide $625 by $13,000: 625 / 13,000 = 0.04807692308
Next, multiply by 365: 0.04807692308 * 365 = 17.5320512882
Finally, multiply by 100 to get the percentage: 17.5320512882 * 100 = 1753.20512882
Rounded to the nearest tenth, the effective rate of interest is approximately 1753.2%.