Question

The wet dog surf company borrows $32,000 for 4 months and will pay $1,120.00 interest . calculate wet dog's annual percentage interest rate (apr) (rounded to two decimal places).

Answer 1

The formula is
I=prt
I interest paid 1120
p principle 32000
T time 4/12
R annual percentage interest rate?
Solve for r
R=I÷pt
R=1,120÷(32,000×(4÷12))
R=0.105×100
R=10.5%

Answer 2

10.5%

Step-by-step explanation:

Amount borrowed = 32,000

Interest amount = 1120 for 4 months

Interest paid in 12 months = 1120*3 = 3360

Interest %age = (3360/32000)*100

= 10.5%