Final answer:
The annual simple interest rate of a loan where $500 is borrowed and $529.38 is repaid in 15 months is 4.7008%.
Step-by-step explanation:
To find the annual simple interest rate of a loan where $500 is borrowed and $529.38 is repaid at the end of 15 months, we use the simple interest formula Interest = Principal × rate × time. The interest paid is $529.38 - $500 = $29.38. The time should be converted into years because we are looking for the annual interest rate. Since 15 months is 15/12 years or 1.25 years, we use the formula as follows:
).38 = $500 × rate × 1.25
To find the rate, we divide both sides by ($500 × 1.25):
Rate = $29.38 / ($500 × 1.25)
Rate = $29.38 / $625
Rate = 0.047008, or 4.7008%
Therefore, the annual simple interest rate of the loan is 4.7008%.