April took out a $600 loan from the bank. At the end of 5 years, she pays back the principal, plus $60 simple interest.
What was the annual interest rate?
To find the annual interest rate, we need to divide the total interest paid by the principal and the number of years.
Total interest = $60
Principal = $600
Number of years = 5
Annual interest rate = Total interest / Principal / Number of years
Annual interest rate = $60 / $600 / 5
Annual interest rate = 0.02 or 2%
Therefore, the annual interest rate is 2%.