Question

Baka borrows $2,000 to buy a piano. The simple interest owed at the end of 3 years is $1,080. What is the annual interest rate on Baka’s loan for the piano?

Answer 1

I = Prt
Interest= 1,080
Price= 2,000
Rate= 12 Months
Time= 3 years

1080 x 100 / 2000 x 3
108,000 / 6,000
= 18%

So the annual interest rate should be 18% :)