Question

Hilary Hu borrowed $4,500.00 to pay for a viola. She agreed to pay back $5,200.00 in 219 days. What exact interest rate was she paying? (Round your answer to the nearest tenth of a percent.)

27.1%


18.5%


17.3%


25.9%

Answer 1

answer : 25.9%

Hilary Hu borrowed $4,500.00 to pay for a viola. She agreed to pay back $5,200.00 in 219 days.

Interest to be paid = 5200 - 4500 = $700

To find the rate we use simple interest formula

`I =P*(r)/(100)*(n)/(360)`

I is the interest

P is the principal amount = 4500

r is the rate of interest

n is the number of days= 219

`700 =4500*(r)/(100)*(219)/(365)`

`700 = (985500r)/(36500)`

Multiply by 36500 on both sides

25550000= 985500 r

Divide by 985500

r = 25.92592

so interest rate is approximately = 25. 9%