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Loan amount: 13000

Method of payment:discount basis
Amount of interest: 625
Term of load: 1 year
Effective rate of interest( to the nearest tenth)

User Zin Kun
by
8.2k points

1 Answer

3 votes

Answer:

5.1%

Explanation:

The proceeds of the loan are ...

13000 -625 = 12375

The amount repaid is 13000. That amount is ...

13000/12375 = 1.05050505...

times the proceeds. So, the effective interest rate is ...

1.05051 -1 = 5.051% ≈ 5.1%

User Javier Flores Font
by
8.9k points
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