Question

Jamerra received a $3,000 car loan. She plans on paying off the loan in 2 years. At the end of 2 years, Jamerra will have paid $450 in interest. What is the simple interest rate on the car loan?

Answer 1

The interest should be 15% over 2 years. 450/3000=0.15

Answer 2

Simple Interest = Principle x Rate x Time
450 = 3000 x R x 2
450 = 6000R

6000R/6000 = R
450/6000 = 0.075 = 7.5% Simple Interest Rate