Question

If $1200 is borrowed for 2 years with $2200 due at the end of the loan, find the annual simple interest rate r. (Enter your answer as a decimal, e.g. 0.01 instead of 1%, and enter an answer correct to the nearest two decimal places.)

a. True
b. False

Answer 1

The annual simple interest rate is approximately 0.92.

Step-by-step explanation:

To find the annual simple interest rate, we can use the formula:

Interest = Principal * Rate * Time

In this case, the principal is $1200, the interest is $2200, and the time is 2 years. Plugging these values into the formula, we have:

2200 = 1200 * Rate * 2

Dividing both sides by 2400, we get:

Rate = 2200 / 2400 = 0.9167

So, the annual simple interest rate, rounded to the nearest two decimal places, is approximately 0.92. Therefore, the statement is True.