Question

John lent 20,000 to Emily. She would reimburse John in 2 installments, first a payment of 15,000 in 2 years and 6 months, and 12,000 in 4 years. What annual interest rate does John get? Multiply the number (in percentages) by 100 and round it to the nearest natural number.

Answer 1

10%

Explanation:

If it's yearly interest rate you can combine 2 numbers:

x - 1st effective rate paid

y - 2nd effective rate paid

k - interest rate

You can create 3 equations:

1) 15000 = x * k ^ (5/2)

2) 12000 = y * k ^ 4

3) x + y = 20000

solving that equation you get:

x = 11812

y = 8188

k = 1,10

Annual interest rate is 0,1 * 100% = 10%

Answer 2

3000

Explanation:

15,000+12,000 =27,000

which means that 27,000 divided by 2 is 13,500 and 13,500 take away 10,000 =3,500 is the interest a year and 3000 a natural number