Question

Nora borrowed $5000 from the bank to buy a car. Her interest paid over the course of the 3-year loan was $750. What was the interest rate?

A) 5%
B) 10%
C) 15%
D) 20%

Answer 1

The interest rate on Nora's loan is 5%.

Step-by-step explanation:

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

Interest = Principal × rate × time

Given that Nora borrowed $5000 and the interest paid over 3 years is $750, we can plug these values into the formula:

$750 = $5000 × rate × 3

Solving for rate, we get:

Rate = $750 / ($5000 × 3) = 0.05 = 5%

Therefore, the interest rate is 5%.