Question

You paid $44 to a loan company for the use of $1,153 for 119 days, what annual rate of interest did they charge? (Assume a 360-day year.) If The annual rate of interest is 11.186 %. (Round to three decimal places.)

Answer 1

11.70%

Explanation:

Given;

Interest paid = $44

Principle amount = $1,153

Time = 119 days =
`\frac{\textup{119}}{\textup{365}}\textup{days}` = 0.326 years

Now,

the interest is calculated as:

interest = Principle × Rate of interest × Time

thus,

$44 = $1,153 × Rate of interest × 0.326

or

Rate of interest = 0.1170

or

in percentage = Rate × 100 = 0.1170 × 100 = 11.70%