Lane French had a bad credit rating and went to a local cash center. He took out a $103 loan payable in five weeks at $123.
What is the percent of interest paid on this loan? Do not round denominator before dividing. (Use calendar year. Round your answer to 2 decimal places. Omit the "%" sign in your response.)
To calculate the percent of interest paid on this loan, we first need to find the amount of interest paid. We can use the formula:
Interest = Total Repayment - Loan Amount
The Loan Amount is $103, and the Total Repayment is $123. Therefore:
Interest = $123 - $103 = $20
Now, to calculate the percent of interest, we need to find the interest as a percentage of the loan amount. We can use the formula:
Percent Interest = (Interest / Loan Amount) * 100
Plugging in the values:
Percent Interest = ($20 / $103) * 100 ≈ 19.42
Therefore, the percent of interest paid on this loan is approximately 19.42%.