Question

Ed stein paid $40.00 interes tonaloan

OF $2,000 for 3 months
what's the rate of interest hepaid?

Answer 1

The rate of interest paid on the principal amount is 8%.

Explanation:

Here, Principal Amount = $2,000

Time = 3 months = (3/ 12 ) Years = 0.25 years

Rate = R

Interest Amount = $40

Now, as we know :

Simple Interest =
`(P * R * T)/(100)`

⇒
`40  = (2,000 * R * 0.25)/(100)\\\implies R = (40 * 100)/(2000 * 0.25)   =8`

or, R = 8%

Hence, the rate of interest paid is 8%.