Question

P=$4000.00,A=$5300.00,t=5 years

The principal P is borrowed and the loan's future value A at time t is given. Determine the loan's simple interest rate r.​

Answer 1

The rate of Simple Interest is 6.5 %

Explanation:

Given as :

Principal = $ 4000.00

Amount = $ 5300.00

The time period of loan = 5 years

Let The rate of simple interest = R

Now,

From Simple Interest method

Simple Interest =
`(Principal* Rate* Time)/(100)`

And , Simple Interest = Amount - Principal

So , Simple Interest = $ 5300.00 - $ 4000.00

Or, Simple Interest = $ 1300

Now, Simple Interest =
`(Principal* Rate* Time)/(100)`

So, $ 1300 =
`( 4000* Rate* 5)/(100)`

Or, $ 1300 × 100 = $ 4000 × Rate × 5

Or, Rate =
`(1300* 100)/(4000* 5)`

Or, Rate = 6.5

Hence The rate of Simple Interest is 6.5 % Answer