Question

2. A man needed money to buy lawn equipment. He borrowed $800.00 for 7 months and paid $53.94 in interest. What was the rate of interest?

Answer 1

The rate of interest is 11.558% per annum paid simply.

Explanation:

Using the formula of simple interest we have

`S.I=(P* r* t)/(100)`

where

S.I = simple interest

P = Principal amount deposited

r = interest rate

t = time period for which the principal amount is deposited.

Applying values in the above expression we get

`53.94=(800* r* 7)/(100* 12)\\\\\therefore r=(53.94* 100* 12)/(800* 7)\\\\r=11.558`