Question

You borrow $620 from your brother and agree to pay back $670 in 19 months. What simple interest rate will you pay? % (round to the nearest tenth of a percent)

Answer 1

We will have the following:

`670=620(1+r((19)/(12)))\Rightarrow(67)/(62)=1+r((19)/(12))`
`\Rightarrow(67)/(62)-1=r((19)/(12))\Rightarrow(5)/(62)=r((19)/(12))`
`\Rightarrow r=(5)/(62)\cdot(12)/(19)\Rightarrow r=(30)/(589)`
`\Rightarrow r=0.05093378608`

So, the simpre interest rate will be of approximately 5.1%.