Question

Jeff borrowed $600 from his brother for 5 years. At the end of 5 years, Jeff repaid the $600 plus $150 in interest. What simple interest rate did Jeff pay?

Answer 1

The simple interest rate that Jeff paid on the $600 loan from his brother is 5% per year. This was calculated using the simple interest formula with the given values for interest paid, principal amount, and time period.

Step-by-step explanation:

To calculate the simple interest rate that Jeff paid, we can use the formula for simple interest, which is I = P * r * t, where I is the interest paid, P is the principal amount borrowed, r is the rate of interest per period, and t is the time the money is borrowed for.

Jeff repaid $150 in interest on a $600 loan over 5 years. Using the formula for simple interest:

• I = $150 (Interest Paid)
• P = $600 (Principal Amount)
• t = 5 years (Time Period)

We need to find the rate r. This can be done by rearranging the formula to solve for r:

r = I / (P * t)

By plugging the values in:

r = $150 / ($600 * 5)

r = $150 / $3000

r = 0.05

Therefore, the interest rate r is 0.05, or 5% per year.