Question

Kaylee obtains a loan with simple interest to buy a car that costs $8,500. If Kaylee pays $1,020 in interest during the four year term of the loan, what was the rate of simple interest

Answer 1

$1020 / 4 ( Years ) = $255

255 / 8500 = 0.03

0.03x100 = 3%

Answer 2

Given cost of car P= $8,500 ,Interest earned I=$1,020 Time T= 4 years. We need to find rate R%.

Simple Interest can be calculated by the formula I = PTR÷100.

Or, R=
`(100 I )/(PT).`

R =
`((1020)(100))/((8500)(4))`

R= 102000÷34000

R=3

Rate of interest = 3%.