Question

If $240 of interest was paid on a $1500 loan, determine the interest rate.

a) 4%
b) 8%
c) 12%
d) 16%

Answer 1

The interest rate on the $1500 loan is 16%.

Step-by-step explanation:

To determine the interest rate, we need to divide the amount of interest paid by the loan amount and then multiply by 100 to get the percentage.

Step 1: Divide $240 by $1500: $240 / $1500 = 0.16

Step 2: Multiply the result by 100 to get the percentage: 0.16 × 100 = 16%

Therefore, the interest rate is 16% (option d).