Question

Mr. Sun borrowed $15,600 for 54 months at simple interest to pay for a new swimming pool. If Mr. Sun paid the bank a total of $21,567.00, what was the simple interest rate of the loan?

Answer 1

Given:

Mr. Sun borrowed $15,600 for 54 months at simple interest.

Mr. Sun paid the bank a total of $21,567.00.

To find:

The rate of simple interest.

Solution:

We know that,

12 months = 1 year

1 month =
`(1)/(12)` year

54 months =
`(54)/(12)` year

54 months = 4.5 years

Simple interest is:

`S.I.=Amount-Principal`

`S.I.=21567-15600`

`S.I.=5967`

Formula for simple interest is:

`S.I.=(P* r* t)/(100)`

Where, P is principal, r is the rate of interest in percent and t is the number of years.

Putting
`S.I=5967,P=15600,t=4.5`, we get

`5967=(15600* r* 4.5)/(100)`

`596700=70200r`

`(596700)/(70200)=r`

`8.5=r`

Therefore, the rate of simple interest is 8.5%.