Question

zhen borrows $1,200.she borrows the money for 2 years and owes $180 in simple interest.what is the yearly simple interest rate on zhen's loan?

Answer 1

r = annual interest rate

F = final value (amount owed including interest)

P = principal (initial amount borrowed)

n = number of years the loan is taken out for

Plugging in the given values:

r = (1300 - 1200) / 1200 * 2

r = 0.15 or 15%

This formula also gives the same result, that the annual simple interest rate on Zhen's loan is 15%.

Answer 2

The yearly simple interest rate on Zhen's loan is 7.5%, calculated using the formula for simple interest and the given values for the interest paid, the principal amount, and the loan duration.

Step-by-step explanation:

To calculate the yearly simple interest rate on Zhen's loan, we use the formula for simple interest:

I = P * r * t

Where:

• I am interested,
• P is the principal amount (the initial amount borrowed),
• r is the annual interest rate, and
• t is the time the money is borrowed for, in years.

We have Zhen's interest (I) as $180, her principal (P) as $1,200, and the time (t) as 2 years.

Substituting the known values into the formula, we get:

$180 = $1,200 * r * 2

Now, we solve for r (the annual interest rate):

r = $180 / ($1,200 * 2)

r = $180 / $2,400

r = 0.075

Converting the decimal to a percentage, we multiply by 100:

r *= 100%

r = 7.5%

Therefore, the yearly simple interest rate on Zhen's loan is 7.5%.