Question

The surma family took out $140,000 home loan it took them 15 years back the loan and ended up paying back a total of $213,500 what was the simple interest rate of the loan

Answer 1

Answer: 3.5%

Explanation:

Interest = PRT / 100

where,

P = Principal = 140,000

R = Rate = Unknown

T = Time = 15

Interest = 213500 - 140000 = 73500

We then slot in the values into the formula

Interest = PRT / 100

73500 = (140,000 × 15 × R) / 100

73500 × 100 = 2100000R

7350000 = 2100000R

Rate = 7350000 / 2100000

Rate = 3.5%