Question

Lane French has a bad credit rating and went to a local cash center. He took out a $100 loan payable in two weeks at $113.50. What is the percent of interest paid on this loan?

Answer 1

Answer: Percent of interest paid on this loan annually = 351% p.a

Explanation:

Given that,

principal amount = $100(loan)

time period = 14 days

interest amount (SI) = $13.50

we have to calculate the rate of interest (i),

Simple interest(SI) = principal amount × rate of interest (i) × time period

13.50 = 100 × i ×
`(14)/(365)`

i =
`(4927.5)/(1400)`

i = 3.51

i = 351% p.a.