Question

You borrow $3,209 from a friend and promise to pay back $4,210.21 in 4 years. What simple interest rate will you pay?

Answer 1

7.80%

Explanation:

Given data

Amount borrowed=$3,209

Payback amount= $4,210.21

Simple interest= 4,210.21-3,209= 1001.21

time= 4 years

We know that

SI= PRT/100

1001.21= 3,209*R*4/100

cross multiply

1001.21*100= 12836R

100121/ 12836= R

R=7.80

Hence the rate is 7.80%