Question

Supposed you pay back $725 on a $675 loan you had for 75 days what is the simple interest

Answer 1

Answer: 1.18%.

Step-by-step explanation: Principal is the initial amount borrowed ($675 in this case).

Rate is the annual interest rate expressed as a decimal.

Time is the time the money is borrowed for in years.

First, let's find the interest charged on the loan:

Principal = $675

Amount repaid = $725

Time = 75 days = 75 / 365 years (assuming a year has 365 days)

Interest = Amount repaid - Principal

Interest = $725 - $675

Interest = $50

Now, we'll calculate the annual interest rate using this interest amount and the time:

Simple Interest = Principal × Rate × Time

$50 = $675 × Rate × (75 / 365)

Let's solve for the rate:

Rate = $50 / ($675 × (75 / 365))

Rate = $50 / ($675 × 0.2055)

Rate ≈ 0.0118 or 1.18%

Therefore, the simple interest rate for the 75-day period is approximately 1.18%.

Answer 2

The simple interest on the $675 loan for 75 days is approximately $50, and the interest rate is approximately 14.18%.

Step-by-step explanation:

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

Interest = Principal × Rate × Time

For this problem, the principal (loan amount) is $675, the interest is $725 - $675 = $50, and the time is 75 days. We need to convert the time to years by dividing by 365:

Time = 75 days ÷ 365 days/year ≈ 0.2055 years

Plugging in these values, we get:

Interest = $675 × Rate × 0.2055 = $50

Solving for the interest rate, we have:

Rate = $50 ÷ ($675 × 0.2055) ≈ 0.1418, or 14.18%

The simple interest on the $675 loan for 75 days is approximately $50, and the interest rate is approximately 14.18%.