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 to the nearest hundredth.
To find the rate of interest, we can use the formula for ordinary interest:
Interest = Principal × Rate × Time
Given that the principal (loan amount) is $6,000, the time is 150 days, and the interest is $210.50, we can rearrange the formula to solve for the rate:
Rate = Interest / (Principal × Time)
Substituting the given values:
Rate = $210.50 / ($6,000 × 150)
Now we can calculate the rate of interest:
Rate ≈ $210.50 / $900,000
Rate ≈ 0.00023388889
To round it to the nearest hundredth, we round it to two decimal places:
Rate ≈ 0.00
Therefore, the rate of interest on this loan using the ordinary interest method is approximately 0.00 or 0%.