Question

After 8 months 750 dollars simple interest was owed on a loan of 9000 dollars. Find the annual interest rate

Answer 1

The Rate of Interest = 12.5 % on P = $9,000.

Explanation:

The principal amount = $9,000

Let the rate of interest = R

Time = 8 months = (8/12) year = 2/3 year

Simple Interest = $750

SIMPLE INTEREST =
`(P * R * T)/(100) \\\implies 750 = (9,000  * R * 2)/(3 * 100) \\`

or,
`750 = (18,000  * R)/(300) \\\implies 750 * 300  = 18,000 R`

or, R = 2,25,000/18,000 = 12.5

⇒ R = 12.5%

Hence, the Rate of Interest = 12.5 % on P = $9,000.