Question

Loan Amount: $13,000 Method of payment: discount basis Amount of Interest: $625 Term of loan: 1 year Effective Rate of Interest (to the nearest tenth) = _____. 4.8 5.1 20.8 57.7

Answer 1

4.8

Explanation:

Answer 2

Loan Amount: $13,000
Method of payment: discount basis
Amount of Interest: $625
Term of loan: 1 year

∴ Rate if interest =
`(Amount \ of \ Interest)/(Loan \ Amount) *100`

`Rate = (625)/(13,000) *100 = \framebox {4.8 \%}`

So, the correct answer is option (1) 4.8