Question

If the lease factor is given as 0.0016, what interest rate is that equivalent to?

Answer 1

The rate of interest is 3.84%.

Explanation:

It is given that the lease factor is 0.0016.

Let the rate of interest be r.

The formula which describes the relation between rate of interest and lease factor is

`\text{Interest Rate}=\text{Lease factor}* 2400`

Substitute Interest Rate=r and Lease factor=0.0016 in the above equation.

`r=0.0016* 2400`

`r=3.84`

The value of r is 3.84, therefore the rate of interest is 3.84%.

Answer 2

to convert the lease factor of a certain amount or transaction to interest rate, we just have to multiply the value by 2, 400.

interest rate = (0.0016)(2400) = 3.84%
the interest rate is 3.84%