The percent per annum interest rate can be calculated using the formula for future value denoted by A,
A = P(1 + rt)
Where
A is the future value of the loan = ($11,160),
P is the principal = ($9,000),
r is the annual interest rate = ?
t is the time = 3
A = P(1 + rt)
11160 = 9000(1 + r*3)
11160/9000 = 1 + 3r
31/25 = 1 + 3r
3r = 31/25 - 1
3r = 0.24
Divides through by 3
r = 0.24/3
r = 0.08
r = 0.08 * 100
r = 8%
The principal P is borrowed and the loan's future value A at time t is given. Determine the loan's simple interest rate r.
P = $9000 A = 11160 t = 3 years