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Jenny took out a #24,000 loan for 1 month and was charged simple interest. The total interest she paid was $118. As a percentage, what was the annual interest rate of Jenny's loan?

1 Answer

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Answer:below

Explanation:

When Jenny took out a $24,000 loan for a month, she was charged $118 which means that the simple interest monthly rate charged was:

= 118 / 24,000

= 0.49%

This means that the annual interest rate would be:

= Monthly simple interest x 12 months

= 0.49% x 12

= 0.059

= 5.9%

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