Question

1) Eddie wants to borrow $16,000 for 8 months. If the lender offers a discounted loan at 10%, how much must Eddie repay at the end of the 8 months?

2) If $14,000 is borrowed for 2 months and $82 of the interest is paid, what is the annual simple interest rate?

Answer 1

1. Assuming that interest is every month, eddie will pay 34,297.42 for his 8 month loan, every month the loan goes from 16000 *1.10 *1.10 *1.10 etc...

2. (14000*2/12*R) /100=3.5%