Question

Pete borrowed $400 for 1 year. He paid back a total of $440. What was the interest rate per year?

Answer 1

$40

Explanation:

find Y

$400=x

$440=x+y

x+$40=x+y

$40=y

Answer 2

I=PRT/100

1. Make R (rate) subject

R/100= I/PT

2. Substitute and calculate

r/100= i/pt

r/100= 40/400 × 1

(40 is from 440-400.The interest)

r/100= 0.1

r/100×100= 0.1×100

r=10% (interest rate per year)

To confirm

I=PRT

I= 400×10/100×1

I= $40 (Interest)