Question

Zebedee takes out a discounted loan for $2,500 for a duration of 12 months, but only receives $2,350 into his bank account. What's the simple interest rate on the loan?

Answer 1

Simple Interest = $145.83

Answer 2

Answer: Simple interest rate is 6%.

Explanation:

Since we have given that

Principal = $2500

Number of months = 12

Interest = $2500-$2350 =$150

As we know the formula for "Simple interest":

`Interest=(P* R* T)/(100)\\\\150=(2500* 1* R)/(100)\\\\150* 100=2500* R\\\\15000=2500* R\\\\R=(15000)/(2500)\\\\R=6\%`

Hence, Simple interest rate is 6%.